LIBRARY OF CONGRESS. 

Chap. Copyright No. 

Shell_H6 8U3 

UNITED STATES OF AMERICA. 



\ 



Paris Exposition of Nineteen Hundred. 



H I STO RY 



OF 



The Prudential Insurance 
Company of America 

(INDUSTRIAL INSURANCE) 
187 5-I 9OO 



FREDERICK L. HOFFMAN, F. S. S. 

n 

Statistician of 
The Prudential Insurance Company of America 



PRUDENTIAL PRESS 

I9OO 
V.. 



11377 

Library «r Conqrs»(, 

Two Copies Kfceiveo 
JUN 27 1900 

StCtNl) COPV. 

Delivered t« 
©RDl* HVlSlON. 

JUN 28 1900 






>KJ 



Copyright igoo, 

64427 - 



The Prudential Insurance Company of America. 



PREFACE. 



THIS work has been prepared at the request of the United 
States Commissioner to the Paris Exposition of 1900, as 
part of an exhibit of charts, diagrams and statistics illus- 
trating full}* the methods and results of Industrial insurance in 
the United States, as represented in the history of The Pruden- 
tial Insurance Company of America. The time at my command 
for the preparation of this work having been very limited, I can 
hardly hope to have succeeded in presenting the subject in all its 
essential aspects to the full satisfaction of the reader, but every 
effort has been made to meet ordinary requirements for informa- 
tion and data on a subject here, for the first time, dealt with on 
a somewhat extensive scale. In view of the fact that The Pru- 
dential Insurance Company of America was the first company 
organized in this country for the transaction of an Industrial 
business on the plan of The Prudential Assurance Company of 
England, I believe that it can be said, with perfect justice, that 
the history of The Prudential is the history of American Industrial 
insurance ; for in all measures, methods and results, the Company 
has not only had its proper share, but it has ever made the most 
determined effort to hold the first place among American life com- 
panies, as a progressive institution vitally interested in everything 
tending to make the business with which its name is inseparably 
associated the most successful of its kind, and to offer the most 
satisfactory form of insurance to the people, who now, to the 
extent of more than three and a half millions, are its patrons and 
policy-holders. I have been compelled, for want of space, to limit 
myself to the barest recital of the historical facts pertaining to 

(v) 



Vi PREFACE. 

the early history of the Company itself, and practically everything 
of a personal character relating to Mr. John F. Dryden, Dr. Leslie 
D. Ward and other early and present officers of the Company 
has been omitted to allow for as wide a discussion of general 
facts as possible. I feel very keenly the imperfect manner in 
which I have done justice to the men to whose energy, skill 
and abiding faith the Prudential Company and Industrial insur- 
ance in general owe so large a share of the wonderful success 
which has been achieved, but under the circumstances referred 
to, no other course was possible without injury to the under- 
taking as a whole. 

For similar reasons I have been compelled to deal very briefly 
with the early history of workingmen's associations for life-insur- 
ance purposes, with the worthy object of providing for uncertain 
contingencies by means of fraternal associations, gilds, burial 
clubs or friendly societies, from the latter of which the present 
form of Industrial insurance is able to trace its origin by an un- 
broken chain of historic evidence. This limitation is much to be 
regretted, since many of the works dealing with the subject, or 
its related aspects, are difficult of access to the general reader, 
while others are practically out of print, and to be found only in 
the larger libraries of New York and Boston. For a complete 
understanding of the causes which have been productive of such 
vast results in the development of modern Industrial insurance, 
the reader should make himself familiar with the works of Cor- 
nelius Walford on Gilds and Friendly Societies, and with the large 
number of Parliamentary reports on Friendly Societies and Indus- 
trial Insurance Companies, on Old-Age Pensions, Compulsory 
Insurance and the Life Insurance of Children, published during 
the period 1 825-1 899. To these must be added the exceedingly 
valuable paper of Mr. Harben on ' ' The History of Industrial 
Assurance," published in 1871 ; "The History of The Prudential 
Assurance Company," published in 1880 ; Baernreither's work on 
' ' English Associations of Workingmen " ; T. Mackay on ' ' The 



PREFACE. Vll 

English Poor" and "Insurance and Saving"; and C. H. E. 
Rea's paper on w Some Observations on Industrial Assurance," 
published in the Journal of the Institute of Actuaries, July, 1898. 
For this country the information is much more limited, but the 
student should not fail to read the address of Mr. Dry den before 
the Massachusetts Legislature in 1895, an< ^ tne March, 1898, 
number of the Charities Review, containing an excellent paper 
on the subject of Industrial Insurance by Mr. Haley Fiske, the 
Vice-President of the Metropolitan Life Insurance Company. A 
valuable address on Industrial Insurance was made by Mr. John 
R. Hegeman, the president of the last-named company, at the 
annual meeting of Insurance Commissioners at Milwaukee, 
September, 1898, but the paper, not being in general circulation, 
must be applied for at the office of the company. Other infor- 
mation and minor publications can be obtained free on application 
to any one of the larger Industrial companies, while the general 
subject of workingmen's insurance can best be studied in Mr. 
Willoughby's " Workingmen's Insurance," and the United States 
Labor Report on ' ' Compulsory Insurance in Germany. ' ' 

Had space permitted, I would have added to this volume a 
bibliography of works and articles in periodical literature, but the 
few references given will indicate sources from which valuable 
material for the study of this most modern form of life insurance 
can be derived. Some of the more important articles can easily 
be traced through Poole's index of periodical literature, under 
the titles of Insurance, Life Insurance, Industrial Insurance, 
Child Insurance, etc., while a brief discussion of controversial 
matter can be found in ' ' The Development of Thrift, ' ' by Miss 
Mary Willcox Brown (New York, 1899). 

This work would have been impossible but for two facts, 
which may be mentioned in explanation of some points other- 
wise likely to be imperfectly understood. The writer has, for a 
number of years, been engaged in the collection of material for a 
larger and more complete work on Industrial insurance in this 



Vlll PREFACE. 

and other countries, and from the partly completed manuscript of 
the larger work this sketch has been prepared to meet the wishes 
of the United States Commissioner to the Paris Exposition. It is, 
therefore, more than probable that within a few years this book 
will be followed by another of a more satisfactory nature, supple- 
menting many matters here imperfectly dealt with. Another 
factor of some importance, and one which is only too often absent 
in similar discussions of social and economic problems, is that the 
writer has had many years of actual field experience, having 
commenced his connection with the business as an agent, succes- 
sively filling the higher positions of assistant and superintendent 
in charge of districts in the East, West and South. I have 
thus had exceptional opportunities to verify field observations 
by extensive office investigations, and I may add that there 
is not in this work a single statement of fact or theory which 
has not the support of personal observation and experience. 
On account of the peculiar nature of the business of Industrial 
insurance, the relations of agents to policy-holders are so very 
close and personal that there is little of importance affecting the 
daily life and struggle of working people that fails to come to the 
knowledge of the intelligent observer who, week after week, calls 
upon the same people for the purpose of collecting the weekly 
premiums. Their difficulties, trials, hardships and final successes 
are known to him ; he is their friend and they are his friends, 
and he is often their adviser, counsellor and aid in emergen- 
cies. Coming in such close contact with hundreds of thousands 
of our wage-earners of all types and nationalities, engaged 
in every occupation, the Industrial agent has opportunities for 
study and observation which fall to the lot of only the very few, 
and I can not but think that in the light of this personal 
experience I may be pardoned for having at times expressed 
myself with exceptional emphasis in favor of the character of our 
industrial population and its struggle for economic independence. 
I am convinced that if those who think ill of the masses, and 



PREFACE. IX 

who see in their humble endeavors little deserving of praise 
and much to blame, would go and really live among the plain 
people, they would soon realize that beneath all of the apparent 
sordidness and selfishness there lies much nobility of effort and of 
aim. The more I have seen of working people, the more I have 
learned to respect their motives, their efforts and the results of 
their struggle, and the less, I acknowledge with shame, do I 
think of the efforts and results of those who, under vastly better 
conditions, with far greater opportunities, fall materially short of 
what, by a reasonable standard, we have a right to expect. 

In the preparation of this volume I have been materially 
aided by the editors and publishers of a number of our more im- 
portant insurance publications, especially Mr. Walter S. Nichols, 
of the Insurance Monitor; Mr. Clifford Thomson, of the Spectator; 
Mr. J. A. Fowler, of the Exchange and Review ; and the editor 
of the Weekly U?iderwriter, who have been good enough to ex- 
tend to me the loan of their complete files, extending in some 
instances over a period of more than fifty years. 

I am also under obligations to the Insurance Commissioners 
of the various States for valuable data and information relative to 
the results of official investigations into the practice of Industrial 
insurance ; to the Health and Charity officials of nearly all the 
States and large cities for valuable statistics and data indirectly 
relating to the business ; to Mr. Julius Clarke, of West Newton, 
Mass. , and Mr. John B. Clark, of New Haven, Conn. , for infor- 
mation relating to the early history of the business in this country ; 
to Mr. John K. Gore, the Actuary of The Prudential, and Mr. F. 
S. Crum, my associate in office, for the reading of the manuscript 
of this work and valuable aid and suggestions which have mate- 
rially diminished the possibility of occasional errors and uninten- 
tional misstatements. But most of all, I am under a debt of grati- 
tude to Mr. John F. Dry den and Dr. Leslie D. Ward, respectively 
the President and Vice-President of The Prudential, for complete 
freedom in making use of the records and archives of the Company 



X PREFACE. 

and for every possible aid in making this work one of interest 
and value to the student of Industrial insurance and its relation 
to the general progress of the industrial population of this coun- 
try. I trust that I have discharged my duty to the satisfaction 
of those into whose hands this volume may fall ; that I have not 
materially fallen short in my effort to do justice to the founders 
of the Company, who have made Industrial insurance the busi- 
ness success of the age ; and that I have done equal justice to the 
millions of honest, high-minded men and women who are the 
patrons, as they are the policy-holders and true makers of The 
Prudential Insurance Company of America. 

F. I* H. 



761 Broad Street, 

Newark, N. J. 



TABLE OF CONTENTS. 

Chapter. Page. 

I. Introduction, i 

II. Early Workingmen's Insurance in America, . 6 

III. Industrial Insurance Before 1874, 20 

IV. Industrial Insurance in America in 1874, . . 39 
V. The Prudential Friendly Society, 1875, ... 55 

VI. The Prudential Friendly Society, 1876-1877, . 84 

VII. The Prudential Insurance Co. of America, 

1877-1879, 94 

VIII. The Prudential Insurance Co. of America, 

1879-1880, 108 

IX. The Prudential Insurance Co. of America, 

1881-1884, - 133 

X. The Prudential Insurance Co. of America, 

1885-1888, 158 

XI. The Prudential Insurance Co. of America, 

1 889-1 89 1, 175 

XII. The Prudential Insurance Co. of America, 

1892-1893, 187 

XIII. The Prudential Insurance Co. of America, 

1894-1896, 202 

XIV. The Prudential Insurance Co. of America, 

1897-1898, 235 

XV. The Prudential Insurance Co. of America, 

1899, 266 

XVI. Summary of Conclusions and Results, .... 284 

Index, 319 

(xi) 



PORTRAITS AND ILLUSTRATIONS. 

Opposite Page. 

John F. Dryden, President, i 

Julius L. Clarke and John E. Clark, 48 

Home Office of The Prudential Friendly Society, 

1875-1878, 55 

First Application Received by The Prudential 
Friendly Society, 58 

Leslie D. Ward, Vice-President, 69 

First Industrial Policy Form Used by The Pru- 
dential Insurance Co. of America, 96 

Home Office of The Prudential Insurance Co. of 
America, 1878-1883, 100 

Edgar B. Ward, Second Vice-President and Counsel, . 127 

Home Office of The Prudential Insurance Co. of 
America, 1883-1892, 147 

Forrest F. Dryden, Secretary, 183 

Present Home-Office Buildings of The Prudential 
Insurance Co. of America, 191 

Industrial Policy Form at Present in Use by The 

Prudential Insurance Co. of America, 236 

Paid-up Policy Form at Present in Use by The 

Prudential Insurance Co. of America, 238 

Industrial Application Form at Present in Use 

by The Prudential Insurance Co. of America, . 240 

Industrial Agent's Agreement at Present in Use 
by The Prudential Insurance Co. of America, 242 

(xiii) 




<^&g~Ji^L^_/ 



HISTORY 



OF 



THE PRUDENTIAL INSURANCE 
COMPANY OF AMERICA. 



CHAPTER I. 

INTRODUCTION. 

The history of The Prudential Insurance Company is, in a 
large measure, the history of Industrial insurance in America. 
Founded in 1875 by Mr. John F. Dryden, the present President 
of the Company, it was the first organization of its kind to prac- 
tically demonstrate the possibility of extending the benefits of 
life insurance to the masses, and the first to demonstrate to 
the industrial population that life-insurance principles, properly 
applied, could be made to serve the useful purpose of providing 
for the burial expenses of every member of the family, in return 
for a small weekly charge collected from the house of the 
insured. Mr. Dryden was the first among a number of American 
insurance managers to put to a successful test the methods of 
the British Prudential Assurance Company, and the first to 
recognize the possibilities of family insurance on the Industrial 
plan in the United States. All efforts in this direction previous 
to 1875 had failed ; every variety of co-operative or other form 
of workingmen's insurance had been tried and found wanting, 
and, instead of acting as an incentive to savings and thrift, these 
forms of pseudo-insurance had acted as a direct discouragement, 
and, instead of tending to diminish pauperism and want, these 
organizations, on account of their inherent worthlessness, were 
partly responsible for an amount of out-door relief and public 
support in illness and at death such as has not been known 

(1) 



2 HISTORY OF THE PRUDENTIAL. 

since Industrial insurance became an active factor in the social 
economy of the American population. 

Recognizing that ' ' Political Economy is concerned with 
the facts of industrial life ' ' and that ' ' this involves a treatment 
of past industrial life, the forces which have been at work and 
which have made it what it is to-day," * I have largely confined 
my sketch to a statement of the underlying causes making 
for the establishment of The Prudential and the subsequent 
development and present success of Industrial insurance in 
America. 

It has justly been said, by a great French writer on English 
history and civilization, that " Whoever attentively considers the 
English turn of mind will be struck by the fact of a twofold 
nature : on one side practical ability, and on the other the absence 
of general ideas and elevation of mind on purely theoretical 
questions," and, ''whether we turn to works on history or juris- 
prudence or any other subject, we rarely find that the great 
fundamental causes of things have been investigated." These 
remarks of Guizot apply with special force to the history of life 
insurance and in particular to that modern branch of the business 
which is to-day, the English-speaking world over, known by 
millions of working people as " Industrial Insurance." 

With this idea in mind, the following sketch has been pre- 
pared as a contribution towards a better study of the all- important 
problem of life insurance for the masses and a better knowledge 
of a form of insurance which, though familiar to millions of the 
industrial population, is practically unknown to even the most 
thoroughly informed students of sociology and political economy. 
While Mr. Spencer could speak of Friendly Societies as the most 
familiar instances of co-operation among working people, and 
rightly included "certain other bodies of kindred natures, chiefly 
burial societies" and " Industrial Assurance Societies ; doing for 
the poor what the more conspicuous institutions for averaging the 
risks of fire, accidents, etc., do for the better off," t it is only too 
true that this form of insurance, of saving and thrift has almost 
completely escaped the notice of the economist and been practi- 
cally ignored by writers on what Mr. Spencer has so well defined 
as forms of ' ' social structure. ' ' 



* Richard T. Ely, Problems of To-Day, p. ioo. 
f Principles of Sociology, Vol. III., p 556. 



INTRODUCTION. 3 

Industrial insurance differs from ordinary level -premium life 
insurance in the following four essential points : first, the 
premiums are payable weekly, instead of being payable quar- 
terly, semi-annually or annually ; second, the premiums are 
collected from the house of the insured by an agent of the 
company, instead of» being payable at the office of the company ; 
third, the amounts of insurance are adjusted to the unit pre- 
mium, instead of the premium being adjusted to the amount — 
that is, in Industrial insurance certain amounts of insurance 
can be purchased for a premium of five cents per week or 
multiples thereof, while in Ordinary insurance the amount is 
in round numbers and usually in multiples of one thousand 
dollars ; fourth, every member of the family can be insured 
for a small premium, while in Ordinary insurance, as a rule, 
only the head of the family is insured for a proportionately 
large amount. 

In the sense of this definition Industrial insurance is prac- 
tically ??iass insurance, while Ordinary insurance is, in a measure, 
class insurance, and the popularity of the former and its extent 
may be attributed to the fact that, for reasons inherent in the 
four cardinal principles, the system provides for contingencies 
and acts as a protection against uncertainties which are not 
provided for by any other form of saving or of thrift. Combin- 
ing with all the elements of security of Ordinary level-premium 
companies a convenience or propinquity in the manner of paying 
the premiums from week to week out of weekly wages, the 
method of Industrial insurance has thus far been proven to be 
best adapted to the wants and convenience of the industrial 
population; hence the term "Industrial," which has from the 
beginning distinguished, and properly so, this form of insurance 
from life insurance on the Ordinary plan for the more prosperous 
elements of the population. The business was called ' ' Industrial ' ' 
by the first company which attempted to develop the system in 
England, in 1849, — that is, "The Industrial and General" ; and 
while most of the companies transacting this form of insurance 
are at the same time transacting an Ordinary business, often 
reaching vast proportions, the Industrial part of the business 
is always separately managed and separately valued, with its 
funds separately invested, similar to the manner in which the 
business and funds of English Fire and I^ife companies are kept 
apart. 



4 HISTORY OF THE PRUDENTIAL. 

Having defined the principles of Industrial insurance, I 
add here a brief definition of its immediate and remote objects, 
which will partly explain its wonderful success from a purely busi- 
ness standpoint of financial importance. The underlying purpose 
of Industrial insurance is to provide for the expenses of burial and 
the cost of the last illness of every member of the family, and 
thus make unnecessary the assistance of the State or of charitable 
agencies in meeting a call for funds at a time when such funds 
are needed most. The abhorrence of pauper support, especially 
for the burial of the dead, is a pronounced trait of every self- 
respecting man, and only those who are familiar with the life 
and the labor of the industrial masses can fairly grasp the deeper 
meaning of the abhorrence of a pauper burial of a member of the 
family in the potter's field. Only those who for years have come 
into intimate contact with the masses can understand the unwil- 
lingness of wage-workers, or what I have elsewhere called the 
industrial masses, to avail themselves of the dispensary doctor 
during the last illness of a father or a child ; hence the readiness 
or willingness on the part of the masses to make use of life insur- 
ance on the Industrial plan as a method of providing for these 
contingencies. It has been well said by B. Demolins that "a 
man who is conscious of his respectability is naturally inclined 
to increase it,"* and, as a first step in this direction, a pro- 
vision against pauper burial and pauper medical attendance 
must be looked upon as a most effective means to elevate or 
ameliorate the lot of the average man. 

To understand this trait — for such it is — among Anglo-Saxon 
peoples, it is necessary to take into account Germanic origins 
which have remained race traits up to the present time. To bury 
the dead was an ancient obligation, and even in the early days of 
the Northmen there is recorded a famous passage in the ' ' Kdda ' ' 
which mentions "the different deaths which men may die," and 
which contains the counsel and demand " That thou give the dead 
man burial wherever thou shalt find him." According to Tacitus, 
1 ' Funerals among the Germans ' ' of his day ' ' were of the highest 
importance," and in the words of Mr. Gummere, from whose work 
I have just quoted, "Whatever is sanctioned by religion and 
dateless customs comes to be regarded as a virtue, ' ' and by the 
same author, in another passage, ' ' it seems reasonable to infer 

* Anglo-Saxon Superiority, p. 183. 






INTRODUCTION. 5 

for the whole Germanic race a general sense of the immense im- 
portance of funeral-rites. ' ' * This respect for the memory of the 
dead became in time an obligation for survivors to make proper 
provision for the burial of the departed, and is met with among 
all peoples and at all times, but most so among the early Romans, 
the Germans and the English, where we find abundant proof of 
an ever-present recognition of the decent burial of the dead as a 
social duty which had to be discharged, even though other duties 
had, for the time being, to be ignored. 

In most of the charters of ancient associations, the Roman 
Collegia and the Gilds of the middle ages, provision was made 
for the burial of the dead as one of the most important duties to 
be discharged by one member of the association towards the 
other. After the destruction of the Gilds by Henry VIII., 
Friendly Societies and Burial Clubs came into existence, largely 
for the purpose of fulfilling one of the essential functions of the 
former Gilds — that is, the proper burial of the dead. Out of 
these clubs and societies Industrial insurance was developed in 
England, the first company for the purpose of transacting such a 
business having been founded in 1849, under the name of the 
"Industrial and General." This company was absorbed in 1854 
by the Prudential Assurance Company, which commenced the 
transaction of an Industrial business in that year, its attention 
having been called to the need for such an extension of insurance 
principles to the masses by a Parliamentary report on ' ' Assurance 
Associations" in 1853^ 



* Germanic Origins, pp. 306, 321, 322. 

t Report on Assurance Associations, London, 1853, P- y i- : "Your Com- 
mittee feel that the ground [s] hitherto occupied by these useful institu- 
tions have been comparatively limited and that their application is capable 
of a great extension, not only in the higher and middle classes of society, 
but also among the humbler classes, to whom it has recently been very 
considerably applied ; and that it is therefore very important that no check 
or impediment should be placed in the way of the further extension of this 
enterprise, not absolutely needful for the security of the public." 



HISTORY OF THE PRUDENTIAL,. 



CHAPTER II. 

EARLY WORKINGMEN'S INSURANCE IN AMERICA. 

Briefly explained, the underlying purpose of Industrial 
insurance has its justification in an inherent trait of Anglo- 
Saxon peoples to make provision for the proper and respectful 
burial of the dead. Under the earlier forms of association, 
as Gilds, Fraternities or Secret Orders, this object was accom- 
plished largely on the basis of status and a kindly spirit of 
brotherly regard, fully in harmony with the conditions of the 
time. During more recent years the condition of status has 
largely passed away, giving place to the condition of contract, 
in which sums certain are insured for in place of indefinite 
promises made by associations operating, contrary to their inten- 
tions, on an unscientific and unbusinesslike basis. 

Modern conditions in a free democracy make it imperative 
that each man shall take care of his own, or, as Professor Sumner 
has put it, "Every man and woman in society has one big duty. 
That is, to take care of his or her own self. This is a social 
duty. For, fortunately, the matter stands so that the duty of 
making the best of one's self individually is not a separate thing 
from the duty of filling one's place in society, but the two are 
one, and the latter is accomplished when the former is done." * 
For fifty years previous to the establishment of The Prudential 
in the city of Newark, N. J., workingmen, in their own way and 
at their own cost, made efforts to provide, by means of the 
principle of association, for the contingencies of illness and of 
death. It is a long and interesting history, which has never 
been written and which has only rarely been touched upon by 
historians. That the principle of ' ' providing by the association 
of the many for the contingencies likely to affect the few ' ' is 
weak and inherently false when applied to life contingencies, 
unless the laws of human mortality, of sickness and finance 



* What Social Classes Owe to Each Other, p. 113. 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 7 

are properly recognized and rigorously applied, is self-evident 
to all familiar with the science of life insurance. The early 
forms of association — secret orders, as they have been called — 
recognized fully the general principle of association ; and while 
they accomplished much good by its application, they failed 
completely the moment they added to their benefit features a life- 
insurance provision for a sum certain, without taking account of 
the laws of human mortality and finance. With all the good which 
these associations have accomplished, they have fallen lamentably 
short in this respect, and countless millions of hard-earned money 
have been sunk in ' ' Fraternal Orders ' ' or other forms of work- 
ingmen's insurance associations, for which neither a fraternal or 
financial return has ever been made. Providing for the wants of 
the few at the expense of the many is a complete perversion of 
the principle of association, a principle fully deserving to be more 
completely understood and recognized by economists and writers 
on social problems, since it lies at the root of all modern efforts 
to improve the methods of production and distribution for the 
benefit of the masses. 

L,ife insurance as carried on by corporations or companies is 
solely a question of contract, while all forms of organizations 
such as Fraternal Orders are either wholly or largely operated on 
the ancient basis of status. The former method concerns itself 
principally with the question of security for the performance of 
its accepted obligations, while the latter has for its object a multi- 
tude of aims, with but small regard for the contract or business 
nature of its implied obligations.* Such organizations existed in 
this country long before even Ordinary life insurance assumed 



* This point is well brought out by Mr. Sydney Webb, perhaps the 
highest authority on Trades Unions, in his recently published work, 
" Industrial Democracy," pp. 154 and 155, where it is said that "A member 
who has paid a whole life-time to the sick and superannuation funds may 
at any moment be expelled and forfeit all claims for reasons quite uncon- 
nected with his desire for insurance in old age. Against the decision of his 
fellow-members there is in no case any appeal ; moreover, the scale of 
contributions and benefits may at any time be altered even to the extent 
of abolishing the benefits altogether ; and such alterations do, in fact, even 
take place in spite of all the protests of the minorities of old members. 
* * * It is a further aggravation that in any crisis the Trades Union, 
unlike the Friendly Society, regards the punctual discharge of sick and 
superannuation liabilities as a distinctly secondary consideration. 



8 HISTORY OF THE PRUDENTIAL. 

definite proportions, and the Odd Fellows, for instance, had a 
large membership before the first active American life company 
was organized, in 1843. Occasionally some of the principles of 
the system of Industrial insurance were partly recognized and 
partly incorporated in the various efforts to improve the condi- 
tion of the masses ; but, standing alone, all of such efforts came 
to an early end and proved useless undertakings. Thus, for 
example, the element of weekly saving by the weekly payment 
of small sums for a future contingency was recognized as early 
as about 1820 by the Philadelphia Fuel Saving Society, which 
required members to deposit weekly small sums of money to 
provide for the winter supply of fuel. The principle of family 
insurance was partly carried out in the practice of the Pennsyl- 
vania Company for the Insurance of Lives, organized in 181 2, 
which accepted risks at ages as low as eight years, indicating 
that even at this early period life insurance at the younger ages 
was thought desirable, if for no other purpose than as an encour- 
agement of the habits of saving and thrift in early life. 

It was not, however, until 1847 that the first effort was made 
to provide genuine life insurance for the masses, and, while the 
experiment proved a failure, it is of considerable interest from an 
historical standpoint, as a strong indication of the early need of 
the masses for life insurance on the weekly-payment plan. The 
credit for having tried this experiment belongs to the Mutual 
Benefit Life Insurance Company, of Newark, N. J., which com- 
pany, in 1847, offered to the less prosperous classes a policy on 
which premiums of twenty-five or fifty cents could be paid 
weekly, but, no provision having been made for the collection of 
the premiums, the plan proved a failure and few if any policies 
seem ever to have been issued. The views of this company on 
the subject of " Life Insurance for All " are clearly set forth in a 
little publication called "The American Manual of Life Insur- 
ance," in which it is stated that life insurance " is a mode of 
accumulation open to all classes of men in all pursuits of life," 
that "the merchant, the minister, the mechanic, the farmer and 
the laborer may all avail themselves of it to some extent with 
ease, and to the greatest advantage," and "it is therefore truly 
an investment for the millions." 

To meet the demand for mass insurance at this early period, 
a form of association was brought into existence which in part 
resembled the English Friendly Societies, and in a larger part 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 9 

the trading and business organizations of the present day. 
"Health Insurance," as it was called, attempted to provide 
for support in sickness and for a burial fund at death, but, 
without exception, all the societies of this name organized 
between 1845 and 1855 came to an early end, in consequence of 
inherent weakness and the absolute impossibility of transacting 
a sick-benefit business through the medium of a non-fraternal 
organization. Although the early health-insurance companies 
all came to an end by about 1855, a revival of these organizations 
occurred during the sixties, when in a somewhat similar form 
another effort was made to gain permanent public support, 
which, however, was again followed by failure. Very little 
seems to have been known in this country as to the practice of 
English Friendly Societies and practically nothing of the system 
of Industrial insurance as practiced at this time by the "Indus- 
trial and General" and the "British Industry," which com- 
menced the Industrial business in 1852 and had by this time 
issued a considerable number of policies. 

The first American reference to the system of Industrial 
insurance, as practiced in England, occurs in Hunt's Merchant's 
Magazine* for 1851, in which the editor, Freeman Hunt, called 
attention to the recent English experiment by the ' ' Industrial 
and General " in the following quotation from the Liverpool 
Chronicle : — 

' ' We have had our attention directed to a brochure bearing 
the title ' What is Life Insurance ? ' written by the Rev. J. B. 
Beade. It is in the form of a dialogue between two laboring 
men, and is mainly calculated to show the illiterate and unthink- 
ing the great advantages offered by well-regulated and stable as- 
surance associations. 'The Industrial and General Life Insur- 
ance and Deposit Company ' has been instituted, and arranged on 
a plan expressly to meet the requirements of persons of limited 
incomes accruing at short periods. With a view of adapting it 
to the wants and wishes of the industrial classes, the directors 
have arranged to grant assurances and annuities as low as ^5, at 
premiums payable weekly, monthly, quarterly, or annually." 
This, as far as I know, is the first distinct mention of the modern 
practice of Industrial insurance in any American publication, 
but the article seems to have attracted little attention and had no 

*Vol. XXIV., p. 521. 



IO HISTORY OF THE PRUDENTIAL. 

influence in establishing Industrial insurance in the United States. 
At this time Savings Banks, Health Insurance Companies and 
Secret Fraternal Societies were apparently more promising and 
more satisfactory methods of insurance and saving, though, as a 
matter of fact, all forms of life insurance were looked upon with 
but a small degree of favor by otherwise well-informed public 
journals and men of influence and power. 

Thus, in the year 1853, the New York Times, in a lengthy 
argument, maintained the view that " He who insures his life or 
health must be indeed a victim of his own folly or others' knav- 
ery," and a Mr. A. B. Johnson, a Baltimore banker and writer 
on economic subjects, expressed himself forcibly against the 
theory of life insurance and in favor of the theory and practice of 
savings banks, holding that all life insurance was wrong in prin- 
ciple and false in practice, and that savings banks alone furnished 
a proper means for the investment of the surplus funds of the 
people. It may not be out of place to give some space to Mr. 
Johnson's views, since they were re-published in his book on 
" Our American Union" in 1857.* The writer argued that "if 
no life insurance would provide for our families after our decease, 
no health insurance or club would provide for ourselves during 
disease, and bury us decently when dead, we should [would] 
provide for these purposes by self-denying accumulations." 
Mr. Johnson did not stop here, but quoted some English data 
and madethe distinct charge that " L,ife insurance is unfavorable 
to domestic purity," and "in England, mothers have been con- 
victed of murdering their infants to obtain some petty sums 
which certain clubs bestow for funeral expenses on members 
whose children die." This is, as far as I know, the first instance 
of the charge of child-murder for insurance money made in this 
country against the system of life insurance for persons of young 
ages. Mr. Johnson was wrong in his confusion of ideas as to 
English burial clubs, which never represented a distinct form of 
insurance associations organized on actuarial principles. He 
admitted that the insurance was only for decent burial purposes, 
and he brought no proof to support his monstrous allegation 
of child-murder for insurance money, an assertion made solely for 
the purpose of emphasizing his views and opinions in favor of 

* A Guide to the Right Understanding of our American Union, N. Y., 
1857, P- 263 et seq. 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. II 

savings banks for the masses. Mr. Johnson's article attracted 
considerable attention, and was answered by the then President of 
the Mutual L,ife Insurance Company, Mr. J. B. Collins, who ably 
refuted the absurd propositions of the writer. Mr. Collins 1 s forci- 
ble argument induced the editor of Hun? 's Magazine to publicly 
disavow any responsibility for Mr. Johnson's views, and to express 
himself as being strongly in favor of life insurance "asa method 
of delivering human life from the tyranny of chance, ' ' and as a 
means or arrangement "by which all the insured become pos- 
sessed at once, for the benefit of their survivors, of accumulated 
property, and in which no one, in any contingency, can be con- 
sidered a loser." * 

What was needed at this period was a more extensive dis- 
cussion of life-insurance principles, with which the most intelli- 
gent were practically unfamiliar. Agents were rarely employed 
on an extensive scale by even the larger companies, and the 
real facts pertaining to the business seldom came to public 
knowledge. 

One of the first public journals to give intelligent considera- 
tion to life insurance was Rhodes's United States Advertiser^ 
which in 1854 contained a lengthy dissertation on this subject, its 
general history, object and principles, the article concluding with 
the statement that ' ' There is a wide and increasing field for the 
operations of life assurance in the United States, and even in the 
city of New York. The subject requires to be familiarized to the 
intelligent middle classes of the people. Much can yet be done in 
this country to popularize life assurance and bring it within the 
reach of even the humblest classes." This is, as far as I*know, 
the first distinct plea for the extension of life-insurance principles 
to the industrial population of the United States. It was made at a 
time when all life insurance in this country was in its infancy, 
when the largest company in existence had only a little over 
8,000 policies in force, and when the total number of policies in 
the United States was estimated at only 30,000. 

Lack of familiarity with the English experiment in the 
direction of extending life insurance to the masses, and a well- 
founded aversion to the existing forms of so-called Health or 



* Vol. XXVII., p. 541. 

f Insurance Monitor, 1854, p. 38. 



12 HISTORY OF THE PRUDENTIAL. 

Co-operative insurance, induced the editor of TucketV s Insur- 
ance Journal* to advocate at this time the extension of life 
insurance to the masses in a manner and by a method which only 
during recent years has been applied with any degree of scien- 
tific accuracy. Mr. Tuckett's suggestion, that "Canvassing 
from home to home will furnish the largest amount of business 
and afford the highest amount of remuneration," made clear 
his conception of the value of life insurance for all, and the 
need of direct personal explanation to the people of the 
methods and objects of the business. Gradually, the view 
that life insurance could be made available to all of the ele- 
ments of the population, the rich, the middle class and even the 
poor, had gained ground. By 1858 some of the leading news- 
papers had taken up the question, and, among others, the Boston 
Herald expressed the opinion that ' ' There is another branch of 
insurance which demands more attention than it has thus far 
received — we mean life insurance — that is, the class of individu- 
als whose families depend upon their daily exertion should 
insure their lives more frequently than they do " ; and hence the 
conclusion that ' ' Those who could not afford to pay for large 
policies could, with a little extra economy, pay the premiums 
upon a policy for $1,000, or upon a policy for a few hundred, 
which would have been of invaluable aid to their families in case 
the bread-winner himself is taken away."f The suggestion of 
the Herald was fully supported by the fact that at that time the 
" humbler classes " did not avail themselves to any appreciable 
extent of life insurance on the Ordinary plan, for out of 830 new 
applicants in the New England Mutual Life, a Massachusetts 
insurance company, only thirty-one were mechanics, while the 
remainder were all men in well-paying positions, or men of 
considerable income and means. Some companies since 1840, at 
least, had granted insurance for sums as low as $100, but the 
demand for this form of insurance had been very small. J It was 
not merely a question of amounts, but much more a question of 



* Tuckett's Insurance Journal, 1853, p. 43. • 
t Hunt's Merchant's Magazine, Vol. XXXVIII., p. 626. 
\ "According to an advertisement of the New York Life Insurance and 
Trust Company, published in Williams's New York Annual Register for 1840, 
life insurance was offered at ages fourteen years and upwards for sums as 
low as $100." 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 13 

the mode of paying the premiums, and for these improvements 
and the consequent introduction in this country of the Industrial 
plan of insurance on the weekly-premium basis, the time had not 
arrived in 1859. That there was an open field and large oppor- 
tunity for the extension of the efforts to insure the masses was 
not only recognized by influential insurance and financial jour- 
nals, but also by at least one of the officers of one of the large 
insurance companies of the day. In a speech made at a conven- 
tion of life-insurance companies in 1859, Dr. R. M. Reese, Medical 
Examiner of the Knickerbocker Life Insurance Company, referred 
to the subject as follows : ''I allude to the importance of greatly 
extending the benefits of Life Insurance among the masses, by 
creating public opinion, and educating the whole people into 
enlightened views of the duty of every man, living in a land 
where casualty and disease expose him to the hazard of early 
and even sudden death." * 

By i860 Ordinary life insurance had assumed considerable 
proportions, and insurance journalism had developed into a 
distinct branch of literature. According to the census of that 
year, there were, in the United States, forty-seven companies for 
the insurance of lives, having an aggregate amount of insurance in 
force of about $180,000,000, on 60,000 lives. Among the foremost 
insurance journals of the period we must name the Insurance Moni- 
tor \ a journal devoting a large amount of its space to the technical 
discussion of the perplexing problems confronting the life-insur- 
ance companies of this period. The Monitor, following TucketV s 
Journal, had frequently argued in behalf of a more extensive 
development of insurance principles, but, as has been pointed 
out, very little had thus far been done to meet these wants, while 
the effort of the ' ' Health ' ' insurance companies had been 
a delusion and a fraud. In the latter part of i860 the Moni- 
tor, in an article on ' ' Life Insurance for the Poor, ' ' f referred 
to the subject of insurance for the masses, as follows: "Every 
workingman should know that for one shilling a week — a penny 
more or less, according to his age — he can leave $500 at death, 
and have his fair share of the profits of the company." This is, 
as far as I know, the first distinct attempt to interest the ' ' poor ' ' 
of this country in life-insurance questions ; and while the term 

* Insurance Monitor, June, 1859. 
f Insurance Monitor, i860, p. 207. 



14 HISTORY OF THE PRUDENTIAL. 

"poor" is one of indefinite meaning and wide application, we 
may safely assume that the writer referred to the masses of people 
earning weekly wages, for it will be noticed that he argues in 
favor of insurance based on a weekly premium of one shilling, 
or about twenty -five cents. This plea for workingmen's insur- 
ance on the weekly-payment plan proved, however, also a useless 
one, and no one seems to have considered it worth while, at 
this period, to undertake the transaction of this form of insurance. 

By i860 the difficulty of extending level-premium insurance 
to the masses had been fairly well recognized. On the one hand, 
it was apparent that direct solicitation, through the medium of 
agents, by a house-to-house canvass, was absolutely necessary to 
familiarize the masses with the principles and objects of insur- 
ance. On the other hand, it was equally clear that the system 
required modification, both in the mode of paying the premiums 
and in the opportunity offered for insurance for small amounts. 
Among others, Mr. Elizur Wright, somewhat in harmony with 
Mr. Tuckett, expressed himself on this question as follows : 
1 ' Forethought and mutuality of effort to provide the most effect- 
ually against future contingencies are not a spontaneous growth 
of the human soil. It is a matter of special cultivation ; the result 
only of some sort of missioyiary labor \ notwithstanding its manifest 
coincidence with the highest interests of all concerned." * 

Mr. Wright clearly recognized the importance and necessity 
of the canvassing insurance agent, and in concluding his argu- 
ment expressed himself as follows on this point : ' ' Among the 
honorable workers in the civilized world to whom the public as 
well as the insured will die indebted, we give faithful and suc- 
cessful life insurance agents a high place. It is hardly possible 
to believe that a life insurance agent can achieve any long -con- 
tinued success without bringing into action some of the noblest 
qualities of a sterling man, and no field that we know of is more 
inviting to an ambition that would devote the best of talents to 
the benefit of society at large and individuals in particular." f 

What was true of Ordinary insurance was still more true of 
Industrial insurance on the weekly-payment plan. Among the 
industrial population practically nothing was known of the prin- 
ciples on which the science of insurance is founded, and of the 



* Mass. Ins. Report for 1863. 
t Ibid. 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 15 

results of life insurance as they were fairly known and recog- 
nized among the more prosperous elements of the population. It 
is not too much to say that there was very little faith in insur- 
ance principles, and that the entire scheme of so-called ' ' Frater- 
nal" insurance, of "Health" insurance, or of insurance on the 
co-operative plan, was looked upon rather as a form of specula- 
tion or even as a game of chance, than as a legitimate method of 
investing surplus earnings for the purpose of providing for future 
contingencies. An immense amount of missionary work was 
necessary to acquaint the masses with the facts which would tend 
to make possible a universal recognition of the adequacy of 
insurance principles as applied to Industrial insurance on the 
weekly-payment plan. 

In looking back over the quarter-century which has passed 
since Industrial insurance was successfully introduced in this 
country, by the establishment of The Prudential in 1875, the fact 
which stands out broadly as perhaps its greatest triumph is the 
absolute confidence of millions of working people in the financial 
solvency of the institutions which carry on this business at the 
present time. So absolute is this confidence, so firm is this faith, 
that it is not too much to say that in this country, as in England, 
the average workingman looks upon an Industrial policy as the 
more prosperous look upon the possession of a government bond. 
This much-to-be-desired result has been brought about by the 
careful management of representative Industrial companies, not 
one of which has ever failed to meet its obligations, and by the 
work of tens of thousands of agents, who daily carry into the 
homes of the people the gospel of insurance in one direction and 
the gospel of thrift in every other direction. 

In view of the clear recognition on the part of Mr. Wright, 
of certain practical aspects of the insurance problem, it is rather 
curious that he should have failed to recognize the intrinsic value 
of the principles of Industrial insurance, or family insurance on 
the weekly-payment plan. Rather to the contrary, such refer- 
ences as were made by Mr. Wright, in his public reports as 
Insurance Commissioner of Massachusetts, to the practice of In- 
dustrial insurance in England, were adverse to its extension to 
the United States on the ground of its being inimical to public 
policy. Mr. Wright, as early as 1865,* expressed himself in 

* Tenth Mass. Ins. Report, 1865. 



1 6 HISTORY OF THE PRUDENTIAL. 

opposition, not only to the insurance of children, but also to the 
insurance of persons above sixty, and, while opposed to the 
Industrial companies and by implication, at least, to the Friendly 
Societies, he fully approved of Gladstone's plan of post-office 
insurance, which was introduced at this period as a government 
measure, which, it was claimed, would produce the same results 
in life insurance as had been achieved in another direction through 
the medium of Post-Office Savings Banks, although subsequent 
experience, extending now over thirty-five years, has clearly 
proven that State trading in the direction of life insurance for the 
masses on a voluntary basis has been a distinct failure, in spite 
of the energetic efforts which have been employed to make it a 
success. 

In his advocacy of Government Insurance Mr. Wright had 
the support of the New York Times, which endorsed the theory 
that the condition of the industrial masses was likely to be 
materially improved through the medium of Government Insur- 
ance for small amounts ; but the Insurance Monitor properly 
directed attention to the fact that what was attempted by means 
of Government Insurance had already been accomplished by 
the British Prudential through its system of Industrial insur- 
ance, and that the company at that time — that is, in 1864 — had 
already 174,000 policies in force on the weekly-payment plan. 
When it is considered that the largest Ordinary life company 
in the United States had in 1864 only a little over 12,000 policies 
in force, it will be readily understood that this statement of 
the actual progress and results of the British Prudential must 
have had a considerable effect on the public mind, and on reflec- 
tion it must have been apparent that what was true for England 
was equally true for this country, namely, in the words of the 
Insurance Monitor (1864), that ' ' the tendency of life insurance now 
is towards small amounts. ' ' But at this period co-operative insur- 
ance, health insurance, trade benefit societies, etc., were looked 
upon as more likely to accomplish for this country what the 
Prudential had already accomplished for England. In New York 
State alone, 303 mutual aid societies, for benefit in sickness and 
assistance at burial, had been organized during the period 
1848-66, while countless other insurance and aid associations had 
been organized in different parts of the country, but of all those 
established previous to 1865 practically none remains in existence 
at the present time. In making reference to one of these 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 17 

extinct associations, the New York Policemen's Insurance Fund, 
the Monitor (1865, p. 191) touched upon the subject of insurance 
for the masses in the following words : ' ' Life insurance in all of its 
forms is so great a blessing that we can never tire of recommend- 
ing its features and progress, and urging it upon every class of 
our fellow-citizens. When everybody is insured, then, but not 
until then, shall we know that the voice of warning and of 
counsel in this respect may properly be hushed." 

While emphatically in favor of insurance for the masses the 
Monitor and other insurance journals missed no opportunity to 
condemn the large number of impracticable schemes constantly 
placed before the public under the name of health insurance 
or co-operative insurance, all of which were inherently weak 
and unable to survive more than a generation at the best. Refer- 
ring to the revival of health insurance at this period, the Monitor 
denounced its impracticability in words which were not likely to be 
misunderstood. "As health insurance in this country and in 
England (meaning the Friendly Societies) has proved a delusion 
and a snare and has terminated disastrously to the insured, con- 
sisting solely of the poorer classes, we should deplore a repetition 
of an experiment that has so little chance of success. ' ' Referring 
to the same subject, the Spectator in 1868 condemned the plea for 
health insurance as one which was " successfully and ingeniously 
framed, and therefore all the more dangerous." With equal 
emphasis, the Insurance Times spoke of health insurance as 
"founded on a fraudulent fallacy, which could only survive by 
deceiving and robbing the poor." 

In defense of these associations it was argued by the manager 
of one of them that "The object is to extend the benefits of 
insurance to a class of people heretofore entirely neglected, and 
by judicious and scientific management this branch of insurance 
can not only be made the most secure and profitable, but it will 
also prove a benefactor to the working classes. ' ' 

Since all of these associations were practically founded on 
guesswork, with no attempt to provide a financial basis for 
maturing obligations, it was only a question of time when 
failure had to take place ; and of all the associations that were 
established at this period, of whatever name, claiming to provide 
insurance for the industrial masses, not a single one survives 
at the present time, and all these futile efforts to effect so-called 
cheap insurance represent an immense loss to those who could 



18 HISTORY OF THE PRUDENTIAL. 

least afford to waste their money in worthless enterprises of 
this kind. 

It is impossible for me, for want of space, to discuss here the 
question of co-operative insurance and the rise and fall of these 
societies, as well as the cause of their inevitable insolvency and 
decay. They represent a dreary repetition of the well-known 
story of the workingmen's insurance associations of England, 
without the redeeming feature of workingmen's insurance on the 
Friendly Society plan. No more instructive lesson is furnished 
by life-insurance history than that which deals with the gloomy 
record of co-operative or other forms of associations attempting 
to furnish so-called life-insurance protection in defiance of life- 
insurance principles. Unfortunately, the very term ' ' co-opera- 
tive" has been almost universally misunderstood, and a special 
meaning has been attached to the word which has remained in 
common use up to the present time, and is likely to remain so 
for many years to come. As Mr. Spencer has well pointed out, 
"Social life in its entirety is carried on by co-operation, and the 
use of the word to distinguish a special form of social life is a nar- 
row use of it." * But this view of Mr. Spencer has not yet found 
acceptance in common thought ; rather to the contrary, it is the 
opinion of the masses, who believe in this special form of co-opera- 
tion, and who agree with Professor Ely, that " Co-operation con- 
templates a complete though peaceful transformation of society," 
and that the method by which this is to be accomplished is to se- 
cure economy by the abolition of the middle-men. f Unfortunate 
consequences must naturally result from such confusion of princi- 
ples and facts. 

Originating at a time when life insurance on the part of 
the masses was being demanded to an ever-increasing degree, 
these associations, often parading under high-sounding titles, and 
often supported by the names of men of prominence in the com- 
munity, imposed upon the credulous masses a sham. An excel- 
lent illustration of one of these concerns is furnished by the 
Manhattan Co-operative Relief Association, organized in New 
York in 1868. From the outset this association was condemned 
by the Spectator and other insurance journals, as a "monstrous 
fraud," and as nothing more or less than "insurance for an 

* Principles of Sociology, Vol. III., p. 553. 
t The Labor Movement in America, p. 169. 



EARLY WORKINGMEN'S INSURANCE IN AMERICA. 19 

uncertain amount at uncertain cost. ' ' It represented only prom- 
ises, and in nowise offered a guaranty of results, though, in the 
words of the Spectator, "Those who are familiar with even the 
elementary principles which govern life contingencies do not need 
to be told that the scheme is as utterly impossible in practice as it 
is wild in theory. ' ' * Unfortunately, the masses and even the 
educated and well-to-do of this period had but hazy conceptions of 
the principles of life insurance, and it is a fact worthy of notice 
that a scheme so plainly speculative had the support of emi- 
nently respectable journals like the Church Union and The 
Independent, and of secular publications like the Atlantic Monthly 
and the New York Tribune, in which the concern was exten- 
sively advertised. As regards the Church Union, it was stated 
at the time, with much truth, that "it was the laudation" of 
the editor of this journal "that first gave repute and standing 
to the delusion and enabled its concocters to inveigle agents 
into its service, and to employ them to deceive the people." f 

After a brief period the Manhattan Co-operative Relief Asso- 
ciation went out of existence, and the money that had been put 
into the Association by ignorant policy-holders was, of course, a 
total loss ; but in spite of actual experience, in spite of emphatic 
condemnation on the part of qualified critics, of the insurance 
press and the Insurance Commissioners of the various States, in 
the absence of a more legitimate and permanent form of insurance, 
such as could have been furnished on the Industrial plan, similar 
associations flourished for a short period in all parts of the coun- 
try. Moreover, they are in existence to-day, numbering their 
members by the million, although the handwriting on the wall 
has for years pointed to an enormous loss, and the annual crop 
of failures has brought misery and loss to hundreds of thousands, 
who in these associations had invested their all. A complete 
perversion of the principle of association is not likely to prove a 
means for the permanent amelioration of the condition of the 
industrial population. 



* Spectator, 1868, p. 271. 

t Insurance Times, 1868, p. 472. 



20 HISTORY OF THE PRUDENTIAL. 



CHAPTER III. 

INDUSTRIAL INSURANCE BEFORE 1874. 

By 1868 Ordinary life insurance had reached almost stupen- 
dous proportions, but, as has been previously pointed out, thus 
far there had been no distinct effort to make level-premium 
insurance available to the industrial population by improvements 
and changes in the method of premium payments. Thousands 
of ventures under the name of health insurance, co-operative 
insurance or life insurance by the secret orders had proven inade- 
quate to the demand. Association after association, companj- 
after company had been organized, flourished for a short time 
and failed. Even under the distinct name of workingmen's or 
laboringmen's insurance a number of companies or societies 
made efforts to gain a firm footing, but without success. Thus, 
in 1868 there was organized the People's Life Insurance Company 
for industrial classes, in the city of New York, and in 1869 the 
Miners' and Mechanics' Life Association of Missouri, the Labor- 
ingmen's Life Insurance Company of Chicago, the Workingmen's 
Life Insurance Company of New Orleans, the New York Work- 
ingmen's Benefit Company, and also the Workingmen's Union 
in the city of New York, but none of these companies, on account 
of inherent defects, was able to attain to even a fair degree of 
prosperity and financial stability, and all, without exception, 
came to an early end. That these associations were created or 
developed in answer to a distinct demand on the part of the 
working-people for some form of life insurance is self-evident 
from a study of the prospectuses, which, as a rule, state, as the 
object in devising the scheme, that "it is to render the blessings 
of life insurance more than ever accessible to the industrial 
classes." Unfortunately, the promoters erred in assuming that 
what was wanted on the part of the masses was ' ' cheap ' ' insur- 
ance, rather than insurance on a plan of premium payment more 
convenient and more in harmony with their ability to pay. In 



INDUSTRIAL INSURANCE BEFORE 1874. 21 

some instances the premiums were to be paid monthly, but in all 
cases the fundamental principles of life insurance were violated 
and the ignorance of the promoters of these organizations of the 
practice and principles of the business was evident from the fact 
that, as a rule, all classes of members were accepted without 
distinction as to age, — the cause of insolvency and failure in the 
English Friendly Societies. 

In 1867 the Insura?ice Monitor recognized the increasing 
necessity of insurance for the masses, stating that "Working 
people, and all whose families are supported by daily, weekly or 
monthly wages, stand more in need of life insurance than any 
other class. ' ' For this reason the Monitor advised improvements 
in the mode of paying the premiums, "which would render the 
task much easier of fulfillment than formerly to persons of moder- 
ate means." In 1868 the Mofiitor further discussed the question 
as to ' ' Who and how many may insure their lives' ' as follows : 
1 ' Whether life insurance will finally be so far cheapened and 
popularized that the working masses, mechanics and laborers, 
those depending on weekly wages, can be persuaded to a general 
adoption of the practice, must depend largely on moral and intel- 
lectual training. Life insurance presupposes a community of 
refined tastes, social affections and correct moral conviction. In 
proportion as our people advance to the higher planes, the custom 
will widen and deepen among the foundation classes." After 
some further remarks, the Monitor concluded that ' ' The common 
people, as well as sagacious business folk, begin to understand its 
value." Up to this time, however, the weekly -premium plan of 
the British Prudential had remained practically unknown to the 
insurance journalists of the period, and, although the British 
Prudential by 1868 had approximately 170,000 policies in force, 
no one writing on insurance subjects seems to have been familiar 
with its practice and results. 

One company, the American Popular Life, organized in 1866 
as a level-premium company, following the effort of the Mutual 
Benefit of Newark in 1847, had offered to accept premiums 
weekly, monthly, quarterly or annually, but, as far as I have 
been able to learn from correspondence with some of its officers, 
very little business was ever transacted on the weekly plan. 

The first distinct effort to establish Industrial insurance in the 
United States would seem to have been made by a Mr. Peacock, 



22 HISTORY OF THE PRUDENTIAL. 

of Zanesville, Ohio, who, according to the Insurance Times 
for 1868 (p. 232), had "made a special study of life insurance in 
its adaptation to the industrial classes," and *' devised a system 
by which he hopes to bring the benefit of the institution within 
the reach of the poorest* laborer, and render it more available 
to him in life and to his heirs at his death, than by any other 
hitherto adopted." This attempt on the part of Mr. Peacock 
seems to have been the first effort to establish Industrial insurance 
in the United States, but there is no evidence to show that the 
plan, so briefly outlined, was ever actually carried into effect, 
and insurance history is silent as regards one who thus early 
recognized the need of the masses for legitimate life insurance 
on the Industrial plan. No doubt the item attracted attention, 
and possibly had some influence in bringing about another 
similar effort during the latter part of the year 1868. 

The Insurance Times for October, 1868, makes mention of 
The Industrial Life Insurance Company, which ' ' title has been 
adopted by a new organization, whose formation exhibits the 
expansive vitality of good seed planted in a rich soil. It is to be 
a purely stock company, promising no profits to the insured, and 
will have a capital of $125,000." Among its incorporators was 
Mr. William H. Beers, at that time Vice-President of the New 
York Life. The Insurance Times stated that the company would 
' ' be a thorough and legitimate life insurance company, but more 
especially adapted to the requirements of the poorer classes. 
It will seek to extend to them the blessings of life insurance, by 
accepting weekly instead of quarter^, semi-annual and yearly 
payments of premiums, and by conforming all its plans, methods 
and practices to the necessities, wants and abilities of the indi- 
gent and laboring portion of the community." 

This effort, also, seems not to have been carried beyond the 
preliminary steps, and I find no record of the Industrial Life 
ever having had a corporate existence. Mr. Beers, as Vice- 
President of the New York Life, had no doubt become familiar 
with the English system of Industrial insurance, but, for reasons 
which can not now even be guessed at, the project fell through, 
and the Industrial Life of 1868 never had more than a paper ex- 
istence. The effort, however, was a step in the right direction, 
and at the time seems to have attracted considerable attention. 

Thus, in the Exchange and Review for November, 1868, there 
appeared an article on "Industrial Insurance" from which I also 



INDUSTRIAL INSURANCE BEFORE 1874. 23 

make a brief extract : ' ' The adaptation of life insurance to the 
circumstances of the working classes is an idea whose practical 
and true development in the United States is yet in embryo. In 
England it has received more attention, but it is there beset with 
the drawbacks which seem inevitable to all projects having for 
their proposed object the bettering of the financial condition of the 
great masses. * * * * Without doubt, the penny of the poor man 
is to have its place in life insurance accumulation as well as the 
dollar of the capitalist, but it behooves all concerned to watch 
that sharpers do not divert the tendency of the hour in this re- 
spect to their own benefit." In explanation of its attitude of 
caution, the Exchange and Review added the statement that 
"A London journal, in an exposition of the frauds which 
have, under the name of industrial assurance societies, so exten- 
sively swindled the poorer classes of England, remarks : ' In- 
dustrial, like the higher kinds of life insurance, can not be man- 
aged properly except upon purely scientific principles. * * * * 
This is the manner in which the Prudential and one or two 
other offices have proceeded, and which now stand out promi- 
nently as the leading industrial assurance companies, presenting 
a marked contrast to the miserable creations of the illiterate 
adventurers.' " 

We have here a clear and concise recognition not only of the 
public demand for Industrial insurance on the plan of the Pru- 
dential of England, but a word of caution against the fraudulent 
and ruinous methods employed by co-operative and other forms 
of pseudo-insurance associations having for their principal 
object the rapid enrichment of their promoters. It was just such 
advice as this, based on a sound knowledge of insurance princi- 
ples, that was needed at this period to keep the ill-informed, 
though perhaps of honest intent, from entering upon an enter- 
prise in which failure on a large scale would have done incalcu- 
lable harm to the cause of legitimate life insurance for the indus- 
trial population of the United States. 

That the subj ect was now attracting considerable attention 
among the intelligent and well informed is apparent in the 
increasing number of articles upon the subject in the insur- 
ance journals of the period. In the Insurance Times for 1869, 
Mr. J. F. Entz, one time Actuary of the New York Life Insur- 
ance and Trust Company, in a long and able article discussed 
the subject as follows: "With all the noble and widespread 



24 HISTORY OF THE PRUDENTIAL. 

benefits which life insurance confers upon society, it must be 
acknowledged that it falls lamentably short in one quarter, and 
that in a quarter where its ministrations are most needed ; we 
mean among the poorer classes. Notwithstanding the immense 
progress of life insurance in this country during the last twenty 
years, we are ignorant of many features practised with great 
success in England, France and Germany. These improvements 
are mostly toward the end of opening the doors to the masses of 
the middle and laboring classes, and every well-wisher of his fel- 
low-citizens who has influence among our insurance companies 
should interest himself in their speedy introduction in the United 
States." 

Mr. Bntz fully recognized, as one of the most important 
steps in this direction, that " every facility should be extended in 
the mode of paying premiums " but he also recognized another 
factor of most importance in the extension of insurance princi- 
ples to the masses, and that was the need of insurance for every 
member of the family. In other words, family insurance on the 
Industrial plan, as practiced by the British Prudential since 1854. 
In reference to this part of his subject Mr. Kntz stated that 
"Burial societies have existed for many years in this country, 
but they have hitherto been defective in two points, ' ' namely, 
1 ' all members were assessed alike without regard to age ; sec- 
ondly, they have not extended the benefit of the subscriber's risk 
to every member of the family." 

By 1870 two of the essential principles of Industrial insur- 
ance had been recognized by influential writers on insurance, 
namely, the weekly-payment principle and the principle of family 
insurance ; and it only remained for those who contemplated the 
practical inauguration of Industrial insurance in the United States 
to recognize with equal clearness the necessity of the collector 
and the adjustment of the amounts of insurance to the premium 
as a unit of five cents, or multiples thereof. 

Mr. Bntz in 1870 had made an attempt to carry his ideas into 
practical execution, and organized that year The Progress L,ife and 
Savings Insurance Company of the United States, but, for reasons 
which can not here be discussed, the project was never carried into 
actual operation, and in some respects this was fortunate, since, 
as has previously been pointed out, failure of any honest attempt 
to promote savings or insurance on a large scale would have 
been disastrous to the cause of legitimate life insurance for the 



INDUSTRIAL INSURANCE BEFORE 1874. 25 

industrial population. The rather curious and interesting com- 
bination of the principle of savings with the principle of insur- 
ance has previously been referred to, but it can not be too often 
pointed out that savings banks and life-insurance companies each 
have their distinct position in the domain of thrift and social 
progress, and they can never be combined to successfully accom- 
plish the same purpose. Savings banks by 1870 had, it is true, 
reached a very important position, but it was far from being true 
that savings habits among the masses had been extensively devel- 
oped. Careful investigations made into the subject by qualified 
investigators, especially in Massachusetts by the Commissioner 
of Labor,* had demonstrated, first, that only a little more than 
one-half of the depositors at that time really belonged to the 
wage-earning classes ; second, that the average number of de- 
posits made per annum by a depositor was small, and in Massa- 
chusetts savings banks was only two and a half deposits for each 
depositor. The latter fact is of much importance in that it shows 
that systematic weekly savings had not yet gained a firm footing 
among the industrial wage-earners of Massachusetts, and the 
Labor Commissioner supports this conclusion by the emphatic 
statement that ' ' Our investigations into the earnings and cost of 
living of wage-laborers, the results of which were given in two 
previous reports, convinced us that savings are the exception and 
not the rule. To reconcile this fact with the general statement 
that the hundreds of millions of dollars now on deposit in our 
Savings Institutions are the savings of the wage-laborer, is im- 
possible. ' ' This assertion was not new to those familiar with the 
official reports of the Savings Banks Commission, who as far back 
as 1852 had stated that "persons who are regarded as wealthy 
make deposits in Savings Banks to the extent of the legal 
limits," and in 1870 Governor Claflin repeated this statement in 
the words that ' ' These institutions are becoming still more the 
favorite places of deposit, not only for persons of small means, but 
also for those seeking investment for very considerable sums. 
The prudent management of those banks has met its reward in 
gaining the confidence of the public to such a degree that even 
the capitalists use them as places of investment. ' ' To these em- 
phatic and unqualified statements I may add the following extract 
from the Governor's message for 1871 : " It is very evident that 

* Third Mass. Labor Report, p. 293 et seq. 



26 HISTORY OF THE PRUDENTIAL. 

a large share of this increase is not the saving of labor. Each 
year shows more deposits by capitalists." From such evidence 
it is quite plain that by 1 870 a very considerable proportion in 
number and a much more considerable proportion in amount of 
the savings-banks deposits were those of the well-to-do, rather 
than those of the industrial or wage-earning masses. 

The facts for Massachusetts would seem fully to warrant the 
following conclusions : first, that by 1870 the considerable in- 
crease in the amount of deposits was largely due to the rapid 
accumulations of the wealthy, who made extensive use of the 
banks at this period ; second, the proportion of the depositors who 
were actually wage-earners was only 58 per cent. ; third, the 
average number of deposits per annum and per depositor was 
only two and a half, which would absolutely prove that the 
habit of systematic weekly or even monthly saving had not yet 
been developed among the industrial masses of Massachusetts, 
and probably not in other parts of the country. Finally, it was 
shown, by investigations made at this period, that the foreign- 
born population, most in need of a small fund for unforeseen 
contingencies, had not yet learned to make extensive use of the 
banks. It remained for Industrial insurance, by its system of 
weekly -premium payments, to largely develop the habit of sys- 
tematic savings which has done much, if not most, to materially 
increase the general welfare of the industrial population. 

What was true of savings habits in the use made of savings 
banks was equally true of savings habits in the use made of Ordi- 
nary life companies by the wage-earning population. Attacks on 
the whole system of life insurance ' ' as one of robbery and fraud ' ' 
were made editorially in the New York Tribune in 1869, while 
other newspapers with equal emphasis condemned the entire 
system of life insurance, much to the detriment of the prog- 
ress of the insurance idea among the masses. Still the ques- 
tion of providing life insurance for the industrial population 
continued to receive occasional attention, though only in a half- 
hearted manner. Evidently, many of those who most seriously 
considered the problem, being confronted by the rising tide of 
co-operative insurance, combined with the hostilities of leading 
newspapers and of men of influence to the entire system of level- 
premium insurance, considered the task of establishing safe 
insurance on the principle of absolute security, in the face of 



INDUSTRIAL INSURANCE BEFORE 1874. 2J 

the demand for cheap insurance, or pseudo-insurance, a hope- 
less one. 

11 Life insurance," in the words of Mr. D. N. Holway, " is a 
purely scientific financial procedure. It guesses at nothing." 
On the other hand, co-operative insurance, so-called, was a pro- 
cedure in defiance of all principles of sound finance, and a guess 
at everything, including the rate of human mortality, on which 
the charges or dues were supposed to be based. Hence, with the 
latter it was only a question of time when the inevitable crash 
would have to take place. Owing to a large variety of causes 
favoring the growth of co-operative insurance, the end was put 
off much longer than would have been the case under normal 
conditions. Still, in the words of the Exchange and Review, the 
co-operative movement, and similar attempts at life insurance 
by organizations or trade societies, were not "without signs 
of good, despite the abnormal forms which they are assuming. 
They reveal a growing interest in life insurance among masses 
who have not yet embraced its provisions. ' ' And as one of the 
possible solutions of the problem the Exchange and Review 
(1869) suggested that "Unions for effecting life insurance with 
the companies, and under special arrangements, may be a part 
of the programme of the future unions which may make indi- 
vidual insurance certain and more available. * * * * 
Cultivating the habit and practice of life insurance, they 
may make it less apart from the practical consideration of the 
people." 

In explanation of these unions for effecting life insurance 
with the companies, which, in a measure, were rather peculiar 
attempts for an alliance of trade associations and others with the 
regular life-insurance companies for the purpose of providing life 
insurance for the members, the Exchange and Review refers to 
one such experiment as follows : ' ' The New York Life Insurance 
Company has made a proposition of this kind to the Working- 
men's Union [previously referred to]. * * * * The prop- 
osition was to insure not less than 1,000 workingmen of the 
various trade unions, issuing 1,000 policies at a premium of 50 
cents a week each." The attempt seems to have failed on 
account of the opposition on the part of some members of the 
trade unions, who were opposed to life insurance on any terms. 
The most important fact is the weekly -premium stipulation, and,. 



28 HISTORY OF THE PRUDENTIAL. 

while still far from being in the nature of Industrial insurance, 
we have here a form of workingmen's insurance tending dis- 
tinctly in the direction of what, in course of time, became known 
as life insurance on the Industrial plan. 

A somewhat similar arrangement was effected at about this 
time by the Metropolitan Life Insurance Company of New York, 
which insured the members of a German organization, the 
Hildise Bund, of Cincinnati, Ohio, and in an historical sketch of 
the company it is stated that "In the year 1869 and for many 
years thereafter the Company did a large business on the weekly- 
payment plan."* The agreement of the company with the 
Hildise Bund was ' ' to insure the lives of those who want to 
become members, if the risks are acceptable to the company, and 
charge therefor the regular rates. The Hildise Bund, which is a 
chartered institution, is charged for, and pays to the company the 
regular quarterly premium, and collects by its own treasurer the 
weekly dues from the members. No matter how these weekly 
dues are fixed, the Metropolitan never receives more nor less than 
the regular premium." It is clear, from official correspondence 
published in the Spectator,^ that the company itself did not transact 
a weekly-payment business, but that the Bund paid to the com- 
pany the quarterly premiums collected weekly from the members, 
and that, strictly speaking, the company itself did not transact a 
weekly-payment business at this period. 

On a plan somewhat similar to the method of the Metro- 
politan, the New York Life Insurance Company in 1870 organized 
a society by the name of The Fortuna Life Insurance Society, as 
a branch of the New York Life, though as a separate organiza- 
tion, having for its object the insuring of the middle classes and 
receiving the premiums in weekly instalments. The society 
issued all the ordinary kinds of policies from $500 to $20,000, 
and the plan was especially designed to bring life insurance within 
the reach of the working population, and accommodate those 
who could best afford to pay their premiums on the weekly- 
payment plan. Whether this society ever actually transacted 
business does not appear from a careful examination of the 
history of the company published in 1895. 

* Souvenir Bulletin, p. 10. 
t Spectator, 1871, p. 352. 



INDUSTRIAL INSURANCE BEFORE 1874. 29 

Another level-premium company which attempted a some- 
what similar plan was the Western New York Life, of Batavia, 
N. Y., which, through the Familien Schutz, transacted a business 
practically identical with the arrangement of the Metropolitan 
with the Hildise Bund ; and, as far as it is possible to judge, the 
Western New York Life Company also used the other concern 
simply as a soliciting and collecting agency. It was stated at 
the time that the Familien Schutz had been organized for the 
purpose of insuring its members against sickness and death by 
the payment of small weekly premiums, and by an agreement 
between the society and the company the latter was to receive 
the premiums collected by the former, and insure its members at 
the regular life rates, and otherwise aid in sustaining the society. 
The plan was stated to have been popular among the German 
population, and a considerable number of members seem to 
have been obtained in different States. 

Still another society on this order was the Bund ' ' Hilfin- 
noth," or New York "Help in Need" society, an organization 
having also for its object " the insurance of workingmen whose 
weekly incomes seldom furnish accumulation of sufficient size 
for the payment of annual or semi-annual premiums on life 
policies." The insurance through this Bund was furnished by 
the New York Life Insurance Company, but later, in 1875, by 
the German Department of the Life Association of America. 
Very probably the New York Life Insurance Company found 
the experiment an unprofitable one and turned the business 
over to the Life Association of America, which company failed 
in 1878. 

Gradually, however, the light was breaking, and the problem 
of genuine workingmen 's insurance was being brought to the 
attention of the public with an ever-increasing degree of 
emphasis and force. The impending failure of the International 
Life of London, and the reinsurance of its American business, 
had drawn public attention to the Prudential of London, which 
company had assumed some of the outstanding risks of the 
International. The controversy was referred to at length in the 
Massachusetts insurance reports, and, as a coincident matter, 
public attention was once more directed to the great success of 
the Prudential Assurance Company. Another most important 
factor was the publication of a paper by Mr. (now Sir) Henry 



2,0 HISTORY OF THE PRUDENTIAL. 

Harben on the history of the Prudential, read before the Institute 
of Actuaries of England, on April 24, 1871. The paper itself, 
and the learned discussion thereon by the foremost men of 
actuarial science of the time, attracted sufficient attention in the 
United States to induce a number of influential insurance journals 
to discuss the subject of workingmen's- insurance on the Indus- 
trial plan from a new standpoint, and among the first to give 
considerable space to the new views regarding Industrial insur- 
ance was the Spectator, which in its October issue for 187 1 devoted 
considerable space to the system of Industrial insurance *as prac- 
ticed by the London Prudential. • I quote from the Spectator as 
follows : — 

" How far, if at all, the English plan of industrial insurance 
is susceptible of application and development in this country 
must be a question for actuaries and managers to decide. That 
there are features of the system which commend it to the accept- 
ance of certain classes in the community, here as there, does not 
admit of doubt. But the reduction of these to practical use among 
us is a problem whose solution may not be very easy and must 
be a work of considerable time. ' ' 

As to the Prudential the Spectator further said : ' ' As we 
showed in the June number of the Spectator, the Prudential has 
attracted to itself and its system the attention of life managers 
everywhere, by reason of its immense volume of business and 
the S3'Stematic manner in which infinite details are kept well in 
hand. And the paper read by Mr. Harben before the Institute of 
Actuaries, some months ago, has brought the subject of industrial 
insurance so graphically and prominently into notice, as to indi- 
cate not only a new sensation, but a ?iew departure in life insur- 
ance. ' ' 

That this new departure would, therefore, attract considerable 
attention in this country, and that there would be developed a 
local demand for some such institution in this country, which 
would both be convenient as to the premium payments and abso- 
lutely secure as to the payment of claims, was only a question of 
time. Inquiries, no doubt, were made during these years directly 
to the Prudential of L/Ondon, for facts and information pertaining 
to the business, and it is on record in Mr. Harben' s own words to 
the Royal Commission on Friendly Societies in 1872 that "in 
America they want to adopt the Industrial system of insurance, 






INDUSTRIAL INSURANCE BEFORE 1874. 31 

and I myself have framed an Act with all the necessary schedules 
for them for the purpose." * 

By June, 1872, the Prudential of London had 812,000 
policies in force on the Industrial plan and 11,000 policies on the 
Ordinary plan of life insurance. In the whole history of life 
insurance no such result had ever before been accomplished, and 
well could the Spectator say of Mr. Harben, the master-mind of 
the Prudential, that "It is very obvious that Mr. Harben, the 
Superintendent of this colossal business, must be a man of 
remarkable organizing and administrative talent," and that "the 
Prudential is doing, upon wholesale principles, the most extensive 
retail life insurance business ever undertaken. But the results are 
certainly remarkable, and, thus far, they appear to bear the stamp 
of entire success." 

It remained for the Insurance Times to make itself the first pro- 
nounced and energetic advocate of the establishment of Industrial 
insurance in the United States. To the Insurance Times, and to 
its gifted editor, Stephen English, belongs the credit for having 
first placed the general facts pertaining to the practice of Indus- 
trial insurance before the insurance managers of the United States. 
From April, 1872, the Insura?^ce Times never ceased dealing at 
length with the subject month after month ; page after page was 
devoted to Industrial insurance, and in the whole history of life 
or any other kind of insurance there is not another instance of a 
similar propaganda in behalf of a "new departure" destined in 
time to become the greatest business success of the age. 

In the July number of the Insurance Times the ' ' Irish Cor- 
respondent ' ' of that paper, in a long and interesting communi- 
cation stated that he had learned from various sources that the 
subject of Industrial insurance, as set forth in the recent issues 
of the Times, was attracting considerable attention among the 
companies in the United States, and that he had been informed 
by the Secretary of the Victoria Assurance Society that Ameri- 
can companies were in direct communication with him on the 
subject, while "Mr. Harben has been applied to for all the 
papers of the Prudential"; hence the conclusion that "You 
may, therefore, look out, I think, for another good result to 
American life insurance, arising from the facts and advocacy of the 
1 Industrial ' business in your journal. I am mistaken, or some of 



* Third Report, Q. 26,125. 



32 HISTORY OF THE PRUDENTIAL. 

your New York companies mean to adopt the industrial system of 
monthly-premium payments." 

It was, however, an error on the part of the Times corre- 
spondent to speak of insurance on the monthly-payment plan as 
Industrial insurance. It can not be too often pointed out that 
Industrial insurance recognizes as two of its elementary principles 
that the premiums must be paid weekly and be collected from 
the hoUvSes of the insured ; but for some curious reason the Insur- 
ance Times, in its early advocacy of the cause of Industrial 
insurance in the United States, advocated the monthly-premium 
payment plan rather than the Prudential system of Industrial 
insurance on the weekly-premium payment plan. 

The increasing demand for workingmen's insurance on the 
Industrial plan is partly explained by the excessive mortality, 
affecting all age periods, which prevailed in the large cities, and es- 
pecially in New York and Newark at this particular time. The 
general death-rate of New York City, which had been exceed- 
ingly high during 1870 and 1871, having been 27.9 and 28.2 per 
1,000, respectively, had increased to 33.0 per 1,000 of population 
during 1872. At the younger ages the mortality in 1872 was, in 
some instances, more than 50 per cent, in excess of the mortality 
for the previous year. The Insurance Times, commenting at 
length on the excessive mortality of children, discussed the prob- 
lem of child-life waste from various standpoints, advancing the 
conclusion that a very large amount of infant mortality was from 
preventable causes, especially malnutrition due to artificial feed- 
ing, the habit of drugging with patent preparations, and the 
general unsanitary condition of the dwellings. Unquestionably, 
New York City at this time was not a very healthy place to 
live in. 

Under such conditions life insurance for the whole family 
was becoming an almost absolute necessity. Nothing remained 
in many cases but pauper support during the last illness and 
pauper funerals for the dead. Pauper funerals in New York 
City, which had numbered 2,897 * n I ^7o, had increased to 
3,502 in 1 87 1, increasing still further to 4,086 in 1872 — a point 
which was not reached again until 1891, when the population 
had almost doubled itself. While, no doubt, much relief was 
afforded by such of the aid societies as were temporarily in 
a solvent condition, these confined their burial assistance to 
adults, while the burial of children was practically unprovided 



INDUSTRIAL INSURANCE BEFORE 1874. 33 

for ; and nothing was more natural than that, during such a 
period of distress, a considerable amount of attention should be 
given to a system of insurance which, in England, had accom- 
plished so vast an amount of good, and had done much, and was 
tending to do more, towards improving the condition of life of 
the industrial population. 

The practical results of Industrial insurance in England 
were of course familiar to many English emigrants who had 
come to this country during the past twenty years, and who, 
either as members of Friendly Societies, of Trading Collecting 
Societies, or of the Industrial insurance companies, had carried 
to this country considerable information of the actual results 
accomplished by family insurance in the old country. 

Another element making distinctly for an increasing interest 
in this form of insurance was the increasing public dissatisfaction 
with the existing forms of co-operative or other kinds of pseudo 
life insurance. While new organizations were being constantly 
organized, and while new movements were constantly set on 
foot, now for purely speculative reasons, now for secret-society 
purposes, or again for trade-society objects, all such move- 
ments ultimately proved disastrous experiences along the now 
well-recognized road which inevitably leads to insolvency and 
ruin. 

The frequency of failure among these numerous societies or 
associations granting sick benefits and promising sums payable 
at death attracted the attention of Insurance Commissioners in 
nearly all the States of the Union. Hardly an official report was 
issued by a State official in charge of insurance matters but atten- 
tion was called to the increasing danger of a great public loss 
and subsequent calamity resulting from the ill-advised schemes 
under the name of co-operative life insurance. Thus, in the 
report of the Missouri Superintendent of Insurance for 1872, 
reference is made to the delusive plan of co-operative life in- 
surance as one demanding some action by the Legislature, and 
the words of warning concluded with the remark that "They 
are mentioned again because in the West this form of insurance 
is making headway, seriously to the detriment of the public 
good." 

The time for establishing an Industrial insurance company 
in the United States had, however, not yet arrived in 1872. The 
fundamental principle underlying Industrial insurance, as well 



34 HISTORY OF THE PRUDENTIAL,. 

as all other legitimate forms of life insurance, is that the first 
a?id most essential element of insurance is safety ; * but at this 
period of insurance history the masses had not yet realized 
that so-called ' ' cheap ' ' insurance, or ' ' insurance at cost, ' ' as 
transacted by men ignorant of the principles and practice of 
the business, could prove only a delusion and a snare. Time 
only could remedy these evils and replace worthless institutions 
by worthy ones. It was as yet too early to establish a com- 
pany solely on business principles, offering insurance as a matter 
of contract, without any pretense of a pseudo-philanthropy ; 
for there was still a belief that somehow, some way, the 
magic word "co-operation" would solve a problem which, for 
its true solution, required exceptional ability, courage, patience 
and unremitting toil, devoted to the achievement of a single 
purpose. 

The Insurance Times continued its efforts in behalf of the 
dissemination of information in the United States as to the value 
and importance of the English method of Industrial insurance. 
Unquestionably, the current hearings, or taking of evidence, before 
the Royal Commission on Friendly Societies (1871-' 74) had much 
to do with the growth of an American sentiment in favor of 
insurance for the masses on the plan of family insurance, so suc- 
cessfully developed by the British Prudential. Mr. Harben's 
testimony given in 1872, no doubt, had come to the notice of 
American insurance managers ; and while there remains no trace 
of an effort to establish an Industrial insurance company during 
1872, there is evidence of such an attempt having been made in 
Columbus, Ohio, during the early part of the following year, 
where, according to the Insurance Times of February, 1873, the 
" Prudential L,ife Insurance Company, with a capital of $200,000, " 
was in progress of organization. This proposed company, how- 
ever, seems never to have come into a corporate existence — 
at least, there is no record, in the report of the Insurance Depart- 
ment for that year, of such a company ever having been incor- 
porated in Ohio. 

In its March issue for 1873 the Insurance Times discussed 
some of the evidence given before the Royal Commission, and 



* Life insurance has properly been defined as "a present means of 
obtaining a certain advantage over an uncertain event." 



INDUSTRIAL INSURANCE BEFORE 1 874. 35 

restated its former position in favor of Industrial insurance for 
the American industrial masses, as follows : — 

" The very first new Life Insurance Company that ought to 
be established in the United States should be one of this class — for 
Industrial business. The field is open to be worked to an unlim- 
ited extent. It would be found to be one of the most successful 
fields ever cultivated for Life Insurance in this country." 

While practical minds, familiar with insurance matters, were 
thus considering the question of workingmen's insurance from a 
standpoint of fact and expediency, at least one of the leading 
economists of the period, Mr. Amasa Walker, advanced arguments 
in favor of government life insurance, on the ground that "the 
State is bound to afford protection to the lives and property of 
its citizens, and any act on its part necessary to the full realiza- 
tion of this great object is not only right and proper, but obliga- 
tory "; and, in Virginia, it was Mr. Henry A. Wise who, in his 
gubernatorial campaign, announced himself unconditionally in 
favor of life insurance by the State. He advocated such a 
course, not because it was likely that the State would offer 
superior plans of insurance at lower rates than those charged 
by private companies, but because the State was in a bank- 
rupt condition, and he had hopes that the government would 
thus be able, by the means of life-insurance profits, to " recruit 
its exhausted or insufficient resources." The Insurance Times 
properly explained that life insurance was the last thing in the 
world that an unsettled government should indulge in, and it is 
much to the credit of the Legislature of Virginia that they ' ' were 
not to be deluded by the specious aspects of the bill presented for 
the incorporation of the scheme, and very prudently laid it in the 
limbo of countless similar visionary plans for ameliorating the 
condition of the human race. ' ' 

That there was a local demand in Virginia for the extension 
of the principles of life insurance to the masses is illustrated by 
a peculiar experiment in insurance attempted at the same time 
that the question of insurance by the government was seriously 
under discussion. Quoting from the New York Evening Mail of 
1873, Cornelius Walford, in the Insurance Cyclopedia (Vol. V., 
p. 165), states that a Richmond (Va.) newspaper during this year 
advertised the Undertakers and Burial Insurance Company, 
which offered ' ' to agree to furnish promptly to all persons in good 
health, under forty years of age, for $1 per annum," the insurance 



36 HISTORY OF THE PRUDENTIAL. 

11 needful for a funeral." For some reason or other this experi- 
ment, which in later years was frequently repeated, seems, then 
as now, to have fallen short of success. 

Still another form of life insurance for the masses had been 
devised by the Hon. Emerson W. Keyes, the author of a work 
on the history of savings banks and one of the directors of the 
American Popular Life, to whose weekly-payment plan previous 
reference has been made. The plan of Mr. Keyes was a combi- 
nation of the principles of life insurance and the methods of 
savings banks, and had, in the words of the editor of the 
Monitor (1873), " sound sense and reason to commend it" ; but, as 
a matter of fact, as a form of family insurance the method was 
faulty and useless for the purpose of family protection, since it was 
practically nothing but term insurance, providing life insurance 
for a specified period of years. A somewhat similar plan was advo- 
cated some years later by Mr. Klizur Wright, but both methods 
of combining a savings bank with a life-insurance company proved 
failures and practically impossible. 

As early as 1870 the Peabody Life had offered a peculiar 
plan of savings-bank insurance to the public, originated and 
copyrighted by H. H. Hadley, the vice-president of the company. 
According to the Monitor, Mr. Hadley had devised this plan "for 
life insurance among people of small means, to be consummated 
by daily or weekly deposits of small amounts." Nothing, how- 
ever, came of any one of these attempts, too fanciful in theory to 
be useful in practice. Neither Keyes' s Labor-Term Insurance nor 
Hadley' s Savings-Bank Plan seems ever to have been adopted by 
any responsible company, and, as far as I have been able to learn, 
no policies seem ever to have been issued covering the peculiar 
provisions incorporated in these attempts, which, however, are of 
historical value in view of Mr. Keyes's undoubted ability as a 
writer on savings-banks history and Mr. Hadley 's later connec- 
tion with a somewhat similar effort which, by a narrow margin, 
failed to prove a success. 

Mr. Hadley seems to have been a man of strong convictions 
on the subject of life insurance for the masses, but wanting in 
technical knowledge and practical ability to grasp the fundamental 
principles of Industrial insurance. Not discouraged by his failure 
to make a success of his savings-bank plan through the Peabody 
Life, he made another effort through the Missouri Valley Life, of 
Leavenworth, Kansas, to furnish some sort of reliable indemnity 



INDUSTRIAL INSURANCE BEFORE 1874. 37 

to the insuring public. The plan of this company was to issue 
policies for $100 each, in form and appearance resembling a 
greenback. The premium was uniform for all ages, while the 
duration of the policy was graded according to age, being, in 
other words, a term policy, somewhat in the nature of the plan 
advocated by Mr. Keyes. While the company called this form of 
insurance " Industrial " insurance, it was neither that nor whole- 
life insurance in any form. The plan was inherently weak, and 
to a considerable extent a deception, in that it opened a very 
inviting and practicable field for fraud. The Insurance Times in 
1873 well spoke of this plan as "one of the most objectionable 
attempts at insurance that has ever been placed before the Amer- 
ican public." 

The Missouri Valley Life, however, transacted a not incon- 
siderable amount of business on this plan, and issued as many as 
8,000 policies during 1874, 5>700 policies during 1875, and 3,200 
policies during 1876 ; but thereafter the business dwindled down to 
nothing, the company discontinuing active business operations 
in August, 1877. 

The failure of the Missouri Valley Life to make a success 
of this form of insurance was due entirely to the inherent weak- 
ness of a scheme which in all essentials was the very opposite of 
Industrial insurance as practiced by the British Prudential. The 
experiment, however, gave proof that there was a strong demand 
for life insurance in small amounts and on a convenient method 
of premium payments, and it was now only a question of time 
when the essentials of success in this direction would be fully 
recognized in the success of the British Prudential. Naturally, 
such further efforts were most likely to be made in the large 
cities of the Bast, where the industrial conditions were more 
favorable to the extension of the principles and practice of Indus- 
trial insurance; and early in 1873 a society was organized with 
this end in view, in Newark, N. J., which in a few years was 
destined to become the corner-stone of the present Prudential 
Insurance Company of America. 

According to the Insurance Monitor for July, 1873, "The 
Widows' and Orphans' Friendly Society was chartered this year, 
under date of April 3rd, by the New Jersey Legislature," for 
the purpose of placing ' ' the blessings of life insurance within 
the reach of those classes whose narrow means restrict them to 
the payment of monthly premiums." It was further explained 



38 HISTORY OF THK PRUDENTIAL. 

that "the clerical labor has generally been found too great to 
admit the adoption of this method by the companies directly. But, 
through the aid of an auxiliary society of this kind, the end can be 
accomplished, and all the benefits of legitimate insurance can be 
secured by those who, if they are inclined to insure at all, fall a 
prey to co-operation, or are forced to join some benevolent organ- 
ization." This society had made an arrangement with the 
Piedmont and Arlington Insurance Company for insuring the 
members by means of a saving-fund policy at ordinary life rates, — 
in other words, it did not differ materially from the numerous 
forms of Unions or Bunds previously dealt with, and which had 
for their object the insurance of working people in substantial 
Ordinary companies through the medium of fraternal or bene- 
ficial societies acting as soliciting and collecting agencies. As has 
been stated, most of the Unions or Bunds were of German origin, 
and the largely Teutonic character of The Widows' and Orphans' 
Friendly Society is indicated by the names of the men who organ- 
ized the same, and of whom it can be said, with all truth, that 
4 ' they builded better than they knew. ' ' 

Of the actual business transactions of this society, the 
objects of which were well defined as assistance in sickness and 
aid in defraying the funeral expenses of deceased members, 
few facts have come to my notice. It is very doubtful whether 
the society ever transacted business on an extensive scale, 
probably finding it difficult, as similar societies had, to do 
business by a method at once clumsy as to practice and inherently 
weak as to insurance methods and principles. The permanent 
interest in this society and its historical value are to be found in 
the fact that on February 18, 1875, the name of the society was 
changed to The Prudential Friendly Society, which title was 
further altered in 1877 to the present name — The Prudential 
Insurance Company of America. 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 39 



CHAPTER IV. 

INDUSTRIAL INSURANCE IN AMERICA IN 1874. 

The beginning of Industrial insurance in the United States 
must be fixed on the date on which the name of The Widows' 
and Orphans' Friendly Society was changed to The Prudential 
Friendly Society, of which Mr. John F. Dryden was made the 
first secretary, as he had been instrumental in bringing about 
the reorganization and the establishment of the new society on 
actuarial principles, identical in all respects with those which 
underlie the transactions of the large and successful Ordinary 
life companies of this or any other country. 

Of the events affecting life-insurance history during the two 
years which passed from the date of the charter of The Widows' 
and Orphans' Society to the date of the foundation of The 
Prudential Friendly Society only brief notice can be taken in 
our historical survey of the facts relating to the origin and growth 
of The Prudential Insurance Company of America. 

The Insurance Times continued to call public attention to the 
subject of Industrial insurance by publishing from time to time 
tables and other data pertaining to the practice of the British 
Prudential. Such information must needs have been of vital 
interest to those who at this early period were considering the 
expediency of establishing an Industrial insurance company in 
the United States. It is much to the credit of the Insurance 
Times that it early recognized the inexpediency of uniting the 
objects of Industrial insurance with those of regular life-insurance 
companies operating on the Ordinary plan, warning American life 
companies to rigidly avoid any and every attempt of this kind.* 

* The importance of this suggestion lies in the fact that the combina- 
tion of Industrial with Ordinary insurance was likely to prove a hindrance 
to the development of the former in that the latter being already estab- 
lished, the former would receive but little attention. The Prudential Insur- 
ance Company being free from this burden in the beginning, was, therefore, 
enabled to develop every technical feature of the business to a high degree 



40 • HISTORY OF THE PRUDENTIAL. 

In the September issue of the Insurance Times for 1873, this 
warning was repeated in the following words : ' ' Hundreds of 
thousands of policies can at once be issued by any responsible 
company that will bring the business fairly before the public as a 
special feature. It can never be well done through any secondary 
organization." But even the Insurance Times had not yet 
recognized the essential difference between Industrial insurance 
on the plan of the British Prudential and Ordinary life insur- 
ance transacted on the monthly-premium payment plan, being 
apparently more in favor of monthly payments than in favor of 
genuine Industrial insurance, in which the payments are made 
weekly and collected from the houses of the insured. By the 
end of the year 1873 the establishment of genuine Industrial 
insurance was, therefore, apparently, as far off as ever, and as 
late as November, 1873, the Insurance Times lamented the fact that, 
in spite of all the arguments advanced and all the rich promises of 
reward, no company had come forward to follow its advice, and 
there is no record of any serious effort to organize an Industrial 
insurance company during the year. 

The confusion of ideas as to the true nature of Industrial 
insurance on the part of the Insurance Times, in advocating a 
system of monthly-premium payments, is one which can be 
explained largely on the ground that life-insurance ideas in 
general were still in a very primitive state. This is apparent 
from another confusion of thought which is only too often made 
in well-intentioned remarks on life insurance even at the 



of perfection before assuming the burdens of Ordinary insurance. The 
Ordinary insurance companies which attempted to transact an Industrial 
business as a side issue invariably failed to make a success of the business 
and discontinued the Industrial Branch after a few years of experiment in 
this direction. On the other hand, the Ordinary companies which attempted 
to transact an Industrial business and for the time being devoted all their 
energies and efforts to the successful transaction of the Industrial business 
succeeded in this direction, but for the time being fell materially behind in 
their Ordinary business. While, therefore, inherently there are no reasons 
why an Ordinary company should not transact an Industrial business, 
practically it was desirable that the business should be first taken up by a 
company devoted exclusively to the transaction of the Industrial business. 
Hence, the fact that Industrial companies to-day transact a very large 
volume of Ordinary business is not to be considered as a contradiction of 
the warning note of the Insurance Times, which was fully justified by the 
conditions existing at the time the article was written. 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 41 

present time. Speaking of life insurance for the poor and 
people of small means who need insurance protection most, 
the Insurance Times, in its issue for December, 1873, pointed 
out that ' ' The benefits of life insurance are peculiarly designed 
for persons of moderate means. As charitable institutions, the 
companies ought, from motives of public spirit, to make it 
one of their principal objects to make small policies readily- 
accessible." No error can be more serious and at the same 
time more self-evident than that life insurance is in any sense 
a charity, for, to the contrary, it is, in all respects, a business 
enterprise identical with banking or any other form of com- 
merce. Through life insurance an immense amount of misery 
is alleviated and an incalculable amount of human suffering pre- 
vented, but it is not as a charitable agency that life insurance 
has brought about this much-to-be-desired end. To confound 
life-insurance companies — which are social institutions, making 
for social and economic independence — with charitable institu- 
tions, the best of which must always, even though in a most 
subtle manner, make for individual dependence,* is an error 
which can not be too much deplored, and one to which, I be- 
lieve, are due most of the sins of legislators who look upon life- 
insurance companies as semi-charitable institutions which should 
grant unheard-of favors and gratuities, cash-surrender values, and 
paid-up policy provisions in excess of the actual values which a 
company may have on hand or have received for the purpose of 
meeting its contracts. This error was repeated in the Massa- 
chusetts bisurance Report for 1873, in the statement that "Life 
insurance seems to have lost the character of a purely benevolent 
institution, and has begun to assume that of a mere speculation." 
As a matter of fact, life insurance at no period of its history 
has had the character of a purely benevolent institution, and had 
not, at this period, assumed the character of a speculative enter- 
prise. The Insurance Times (Dec, 1873), however, fully recog- 
nized the true nature of life insurance in its interpretation of the 
character and objects of the British Prudential in the statement 
that " the Prudential is a company which makes no loud-sounding 



* "I fully believe that to-day the next most pernicious thing to vice is 
charity in its broad and popular sense." (W. G. Sumner.) 

"The number of our almshouses, asylums and charitable institutions 
of all sorts, of which we boast so much, is really our shame." (R. T. Ely.) 



42 HISTORY OF THE PRUDENTIAL. 

pretensions — it makes no parade of philanthropy, and of its wish 
to benefit the human race." This company says, in substance, 
"We are business men, and must be paid for our trouble; we 
therefore charge an extra premium for extra trouble, and collect- 
ing money shilling by shilling involves no little extra trouble. 
But in return we guarantee you as much absolute security as is 
enjoyed by those who have large sums to invest," and hence 
the conclusion that " If the amounts which were actually paid to 
workingmen upon the occurrence of death by the life insurance 
companies during the year 1872 are compared with the relief 
afforded within the same period by the friendly societies, it will 
be found that the insurance companies have proved in practice 
far the more beneficial," * and the further conclusion that "The 
Prudential Assurance Company [of London] has not only enlarged 
the sphere of life insurance, but has conferred a substantial 
benefit upon the working classes. We can readily appreciate the 
feelings of pride with which the directors of the company, in look- 
ing back upon the splendid success which has been achieved 
by the company during the past year, claim that their triumph 
is one of the most memorable that has ever been gained 
by any life insurance company," and to these remarks the Insur- 
ance Times adds, ' ' We urge once more, as we have already urged 
before, the speedy establishment of a good industrial insurance 
company in New York." 

Reference has been made to numerous attempts to combine 
the functions of a savings bank with the functions of a life-insur- 
ance company, and one reason why so many of these projects 
originated at just about this time is to be found in the fact that, 
in consequence of numerous failures of Ordinary life companies, 
savings banks were held in higher esteem among the working 
classes than the numerous life-insurance projects of the period. 
Once more a distinct antagonism of life-insurance companies to 
savings banks was developed, but, as was pointed out by the 

* In a paper read at the International Congress of Charities, held in 
Chicago in 1893, it was pointed out that in the town of Rochdale, out of a 
total sum of ,£23,952 paid out for funeral expenses, ,£19,493 was paid by 
Industrial companies, while the local Friendly Societies contributed £"4,027 
and the Trades Unions ,£432. Thus it was shown that in a town recognized 
by economists as one in which thrift institutions of all kinds have prospered 
most, Industrial insurance holds to-day first rank as a means of providing 
for the expenses of burial and incidentally for the cost of the last illness. 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 43 

Monitor and other insurance journals, the one class of institu- 
tions had never seriously interfered with the other, and, " on the 
contrary, it is more likely that the business of each has been 
larger on account of the other's existence." However, as I have 
had occasion to point out, habits* of systematic saving had not 
been extensively developed in the industrial population previous 
to 1875. The difference between savings banks and insurance 
companies is essential. The savings bank represents a different 
form of voluntary thrift from that of the insurance company. 
The depositor is not required, and is not induced to deposit 
weekly or monthly, the surplus of his income over his expenses, 
but, once he becomes a life-insurance policy-holder, a certain 
degree of compulsion forces him to make premium payments 
weekly, quarterly, semi-annually or annually, as the case may 
be. This essential difference between savings banks and life- 
insurance companies should be better recognized than has thus 
far been the case, and from this point of view, I feel satisfied that 
insurance companies, especially Industrial insurance companies, 
represent a more distinct form of thrift promotion than the ordi- 
nary savings banks. 

Previous failures to combine the two thrift functions into 
one had not discouraged those who were more favorably inclined 
towards savings banks than towards life-insurance companies. 
Among those who made the most determined, as it was in a 
measure the last, effort to establish savings-bank insurance was 
Mr. Elizur Wright, the well-known actuary and former Insur- 
ance Commissioner of Massachusetts, who in 1872 commenced 
an agitation in favor of a Family Bank,* which, though devised 
by one experienced and familiar with life-insurance theories and 
practice, was at once as vicious and as weak as any method 
which had ever been devised to develop both objects of savings 
and insurance. In advocating his plan of savings-bank insur- 
ance, Mr. Wright went to such extremes that in the end he 
became the open antagonist and enemy of all forms of life insur- 
ance, conveying to the public the idea that ' ' the system of life 
insurance as generally conducted was a humbug and wrong, 
iniquitous and deceptive, unfair to the policy-holder, unsafe to 
the companies, and altogether behind the age, and unworthy of 
the American people." The attacks on life insurance made by 

* Politics and Mysteries of Life Insurance, Boston, 1873. 



44 HISTORY OF THE PRUDENTIAL. 

Mr. Wright induced Mr. English, the editor of the Insurance 
Times, and a life-long friend of Mr. Wright, to express himself 
in an open letter as follows : ' ' The failure of your attempt to 
foist your scheme upon the life-insurance companies was followed 
by your bitter and unwarrantable attacks upon the life-insur- 
ance system and companies of America. You have left nothing 
undone, unsaid and unpublished, to destroy public confidence in 
all the life companies, and, if possible, to ruin the business" {Insur- 
ance Times, September, 1874). It would be difficult to frame a 
more severe and just condemnation than this. Mr. Wright's plan 
was never carried into actual practice, but it is claimed, by those 
who are familiar with the facts, that some of the companies which 
embodied some of Mr. Wright's theories into their practice, and 
which were guided by his advice, were unable, in consequence 01 
his unsound theories, to meet their outstanding contract obliga- 
tions, to the serious disappointment of the thousands of widows and 
orphans who were thus deprived of their legitimate support. 

While, by the close of 1874, the problem of life insurance for 
the masses had, no doubt, received more serious and thoughtful 
recognition than ever before, no one seems to have had the cour- 
age to undertake a task which gave every indication of failure 
and very little assurance of success. 

As an indication of the attitude of experienced life managers 
towards the new system of insurance, by this time so success- 
fully practiced in England, I quote a few remarks from inter- 
views reported in the Spectator during the first half of the 
year 1 874. These interviews are very suggestive in the light of 
future events, and I abstract a few replies which are of special 
importance. In answer to the question put by the Spectator, " Do 
you think that this system can be made to furnish safe insur- 
ance?" Mr. Heber Smith, the Vice-President of the Northwestern 
Mutual Life Insurance Company, replied : "I have not become 
familiar enough with the principles underlying the ' industrial ' 
scheme of life insurance to speak definitely regarding its adapta- 
bility, but from what I know of it, I have no desire, as an officer, 
to experiment with it" (January, 1874). In reply to the same 
question Mr. Samuel H. White, Vice-President of the Charter Oak 
Life Insurance Company, replied: "So far as I have examined 
the plan, I think it impracticable, unless the sole object is for the 
poorest classes to provide a ' burial fund.' Practically, it can not 
do much good" (February, 1874). Mr. Nathan D. Morgan, 



INDUSTRIAL INSURANCE IN AMERICA IN 1874. 45 

President of the North American Life Insurance Company, re- 
plied to substantially the same question, "I would promote, 
in every proper way, a habit among the poorer classes of in- 
vesting a portion of their earnings in life insurance. Some mode 
should be devised for doing this at less cost than under the 
present agency system " (May, 1874). Thus it appears that 
vSome of those who were in a position to know either* did not 
favor the plan, or but imperfectly understood the essential prin- 
ciples of the theory and practice of the system, while no one seems 
to have had the courage to undertake the formation of a company 
designed to transact Industrial insurance, even in connection 
with, or as a part of, the business of an Ordinary life company. 

While the insurance press continued to give considerable 
attention to the general subject of Industrial insurance, the 
Insurance Times , more than any other publication, continued its 
advocacy of the system, and of the establishment of an Indus- 
trial company in the United States. The editor, Mr. Stephen 
English, not only gave space to the general discussion of the 
principles and practice of the business, but supplemented such 
theoretical discussions with practical demonstrations of the bene- 
fits and results of Industrial insurance from the standpoint of public 
policy. In an article entitled ' ' The Progress of Industrial Insur- 
ance," the Insurance Times (April and May, 1874) pointed out the 
educational influence of this work among the masses of the people 
as in itself a matter of importance and of immense value. In 
explanation, the statement was added that "Year after year these 
thousands of artisans and operatives, thus effecting insurance on 
their lives, are taught thriftiness, carefulness, prudence, and fore- 
thought. The very fact that these thousands of workingmen are 
induced to make timely provision against the day of death, by life 
insurance, for even ever so small an amount, is a proof that the 
recklessness, selfishness, and spendthrift habits of these men are 
giving way before better influences, and that the future of their 
homes and families is of more consideration to them than to any 
of their class in days gone by." A more worthy and deserved 
tribute has seldom been paid to the English workingmen than in 
the above lines, written by one who, although unknown to the 
American working people, yet rendered them a most important ser- 
vice, and to him Industrial insurance owes a debt of gratitude, as 
one who during a dark hour of American social history did much, 
if not most, to keep the facts pertaining to Industrial insurance 



46 HISTORY OF THE PRUDENTIAL. 

before the public, and who, in spite of discouragement, did not 
despair of seeing his ambition realized by the early establishment 
of an American Industrial insurance company. 

It was otherwise with Mr. Elizur Wright, who, for rea- 
sons which will probably never be known, had been opposed 
to Industrial insurance almost from the time the system had 
been gaining ground in England, and who, as far back as 
1865, had been making attacks on what he called Industrial 
insurance, but what in reality was the old system of Burial 
Societies, which was then rapidly passing away, giving place 
to the modern form of workingmen's insurance on the Indus- 
trial plan. 

In an open letter to the editor of the Insurance Times, dated 
May 26, 1874, Mr. Wright summed up his charges against 
Industrial insurance, stating that it was his conviction that "the 
evil of Mr. Harben's gigantic success decidedly outweighs the 
good." Among other charges Mr. Wright asserted, as a matter 
of fact, that the system was one productive of infanticide, that 
the companies were living on lapses, and that the general system 
was an iniquitous one, and practically of no further benefit than 
that it was profitable to Mr. Harben and the stockholders in the 
Prudential. Mr. Wright confined himself to generalities, making, 
however, specific charges without a single statement of fact, and, 
though himself an actuary, he expressed an actuarial opinion 
without actuarial testimony or facts to support it. He referred 
to Mr. Gladstone's remarks in 1864, to the effect that the Pruden- 
tial was insolvent, but he did not say that these remarks of Mr. 
Gladstone's had been refuted and proven unfounded by the high- 
est actuarial authority in England, the President of the Institute 
of Actuaries. He repeated the thirty-year-old charge of child- 
murder for insurance money, occasionally made against the old- 
time type of Burial Clubs, without citing a single case in support 
of his monstrous allegations. 

Mr. Wright was immediately answered by Mr. James Alex- 
ander Mowatt, a man thoroughly familiar with the practice of 
Industrial insurance in England, and also, under date of June 
23rd, by Mr. Harben, who, in an open letter addressed to the 
editor of the Insurance Times (published August, 1874), emphati- 
cally and ably refuted the charges made by Mr. Wright by a 
simple statement of the facts in the case. Mr. Harben concluded 
his letter with the following remarks, which I quote as they are 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 47 

likely to be of permanent interest to the student of the develop- 
ment of Industrial insurance in this country : — 

"The theory that a working man should be prohibited from 
insuring the means of burying his child because the sum of 
thirty shillings (seven and a half dollars) will tempt him to 
commit murder, hardly needs serious discussion.* Can Mr. 
Wright support this argument by the slightest trustworthy evi- 
dence ; and if he can, is murder for the sake of insurance money 
confined to ' the poor, ' because, if not, why not go further ? 

" Why do the critics of this Company always speak in gen- 
eral terms ? Why do they not make some definite charge against 
it, and instead of confining themselves to ' ' may-bes ' ' and ' ' no 
doubts," point out any engagement broken, any benefit with- 
held, or any promise unfulfilled ? But no ! The Prudential 
Company may have faithfully performed every engagement into 
which it has entered ; it may have opened up a new source of 
joint-stock enterprise ; it may have brought the benefits of life 
insurance within the reach of the humblest classes ; but it has 
not justified the predictions that would-be-prophets made by 
egregious failure. It has committed the unpardonable crime of 
success. ■ ' 

To these distinct and well-supported charges of inconsistency, 
ignorance and perversion of facts Mr. Wright made no reply, 
except in a rambling communication under date of August 14th, 
in which he once more shifted the burden of proof to generalities 
not deserving of space. This unworthy attempt to evade the real 
points at issue, brought forth a most emphatic and scathing reply 
from Mr. English, the editor of the Insurance Times (September, 
1874), who expressed himself, in part, as follows: "You have, 
upon your own admission, made mistakes in your attempts to 
reform life insurance, and your blunders have made the insurance 
fraternity mistrustful of your theories and experiments. The 
officers of our life companies would be recreant to their fiduciary 
duties if they allowed themselves to be bullied into an acceptance 
of your scheme, and they only show a proper and manly spirit in 

* "The time has passed for dealing with the masses as children who 
are to be treated to truth in quantities and on occasions suited to their 
welfare or the interests of society. The political economist only aban- 
dons his ground of vantage and forfeits the confidence of the community 
when he accepts any responsibility for the use that may be made of the 
truth he discovers and discloses." (Francis A. Walker.) 



48 HISTORY OF THE PRUDENTIAL. 

resenting your misrepresentations and decrial, by letting you con- 
temptuously and severely alone." 

Industrial insurance can not be said to have been injured 
by this controversy, and the subsequent correspondence on the 
subject. Clear and emphatic proof had been produced that the 
system was not only worthy of public confidence, not only met 
a great public want, but, also, could be undertaken on a business 
basis, and was likely to produce a fair rate of profit in return. 

Forces, independent of the agitation of the Insurance Times, 
were making for a better public understanding of the subject, and 
tending towards a more clearly recognized necessity for the estab- 
lishment of genuine Industrial insurance in the United States. 
While, as we have seen, Mr. Wright, as a former Commissioner 
of Insurance of Massachusetts, had proclaimed himself an open 
and uncompromising opponent to the introduction of the system, 
another Massachusetts Commissioner, Mr. Julius Clarke^ in his 
annual report for 1874, came forth plainly and emphatically -in 
favor of the system of Industrial insurance as practiced by the 
British Prudential. In this report, which must ever be looked 
upon as one of the foundation-stones of the present-day structure 
of American Industrial insurance, Mr. Clarke addressed the Legis- 
lature as follows : — 

1 ■ In presenting to the Legislature a general view of the dif- 
ferent matters of interest and importance relating to insurance, 
which have attracted attention during the last year, reference 
should be made to the subject of industrial insurance. The term 
is applied with sufficient appropriateness to insurance for small 
amounts, supposed to be particularly adapted to the wants of 
persons of small means, who are engaged in various industrial 
pursuits." After giving a brief historical sketch of the origin 
and growth of Industrial insurance in England, Mr. Clarke dealt 
with the practice of the British Prudential, and pointed out that 
■ ' Though it does not, like the old Friendly Societies, guarantee 
allowances in sickness, yet like them it adjusts the amount of 
insurance to the premium paid ; that is to say, instead of naming 
certain sums as the premiums for which it will insure the payment 
of ten, a hundred or a thousand pounds at death, it offers certain 
amounts of insurance in return for the payment of small fixed 
sums each week ; such as one penny, twopence, threepence or 
fourpence, as the case may be. Like the Friendly Societies, also, 
the company sends its collectors from house to house and collects 





XJZs-* 




^A, ^Cf^A/Cr- 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 49 

the premiums weekly. ' ' Thus Mr. Clarke had thoroughly and 
completely grasped three of the four essential principles of Indus- 
trial insurance, — the charge of a weekly premium, the adjustment 
of the amounts of insurance to this weekly premium, and the col- 
lection of the premium weekly from the house of the insured, — 
and, as we shall presently note, he had not overlooked the fourth 
essential, the principle of family insurance — that is, of persons of 
both sexes and all ages. 

Mr. Clarke did not fail to recognize the historic continuity 
of the business and its direct relation to the Friendly Societies 
and earlier forms of burial associations. In his own words, ' ' The 
secret of the success of this company may be found in the fact 
that the ground had been thoroughly prepared for the new system 
by the old societies. The company merely takes advantage of 
tradition, habits and ideas that have been the growth of more than 
a century. In their adoption and application it is hoped that the 
company will not, like so many Friendly Societies, prove in the 
end a failure." 

In explanation of the fourth cardinal principle of Industrial 
insurance, — that is, the insurance of every member of the family, 
and incidentally the insurance of children, — Mr. Clarke stated that 
"One of the objections made to the Company's mode of doing 
business, is, that it grants insurance upon the lives of young 
children. This was the practice of the Friendly Societies, and 
in regard to them, also, the objection was urged that the practice 
held out inducements to infanticide. The managers of the 
Friendly Societies contended in reply, that the character of poor 
people is not such as entitles the objection to weight, and for the 
credit of human nature it is hoped they were right. They main- 
tained further, that even if the danger existed, which they denied, 
it might be amply guarded against by requiring proper medical 
examinations and certificates. The contract of life insurance 
being unlike that covering a fire or marine risk, a contract of 
indemnity, it is not absolutely necessary that the interest in the 
life insured should be of a pecuniary nature. The parental rela- 
tion in itself is all that is required to support the contract. Were 
a pecuniary interest requisite, life insurance might still be properly 
invoked to provide against extraordinary expenses forced upon a 
poor man by sickness or death in his family, as well as to compen- 
sate him for the loss of aid and assistance derived from the 



50 HISTORY OF THE PRUDENTIAL. 

services of his child." This extended quotation shows how 
carefully Mr. Clarke had gone into the facts of the case, and how 
well he had considered the pros and cons of a question to which 
there were bound to be at least two sides. 

Mr. Clarke had also considered the question of cost and the 
expense rate of transacting an Industrial business, stating that 
' ' It has also been stated that the rates charged by the Prudential 
upon its small policies, are unreasonably high in proportion to 
those usually charged upon policies of larger amounts ; also that 
it makes no dividends, and pays no surrender values"; but, he 
adds, ' ' it is unnecessary for our purpose to examine in detail the 
Company's mode of doing business, if the prices it charges are 
out of proportion to the benefit it confers, the proper ratio will 
ere long be established by competition. ' ' Mr. Clarke recognized 
fully that stability was the main point in regard to all institutions 
created for the purpose of insurance, and especially so in the case 
of those designed to bring life insurance within the reach of the 
masses. Quoting his own words, ' ' The number of persons whose 
happiness is staked upon the solvency of institutions of the latter 
class is larger, and they are persons whose situation is such that 
the distress produced by disappointment is more cruel." It is 
clear that Mr. Clarke realized fully that the most vital element in 
Industrial insurance is the absolute necessity that such insur- 
ance shall be of the same intrinsic value as life insurance on the 
Ordinary plan sold to the well-to-do, leaving the question of cost 
and the expenses of conducting the business, which consists of a 
multitude of intricate transactions, to the people themselves and 
to the law of competition which regulates profits in similar busi- 
ness undertakings. 

Extended consideration was thus given by an intelligent 
Insurance Commissioner to a business which had not yet been 
established in this country, and his views were communicated 
to the Legislature of Massachusetts solely for the purpose of 
placing before the people of the State the facts pertaining to a 
business which, from his point of view, was one of great public 
benefit, and which was deserving of attention from the stand- 
point of public policy. His opinion as to whether the time had 
come for the organization of such companies in this country, is 
expressed in the following quotation : ' ' It does not of course neces- 
sarily follow, that because there is a demand in England for small 



INDUSTRIAL INSURANCE IN AMERICA IN 1874. 51 

policies, as shown by the experience of the Benefit Societies and 
the success of the Prudential, that therefore a similar demand 
exists in this country. Various circumstances, however, indicate 
that the want exists here also. As one of these, may be mentioned 
the great variety of forms in which what is called co-operative 
insurance crops out. This Department has long been and still 
is greatly embarrassed by the frequent attempts to impose this 
co-operative fallacy upon the community, and all the more so 
because they are often made by people of most excellent inten- 
tions and unimpeachable respectability. Though co-operative 
insurance sometimes resembles industrial insurance in the small- 
ness of the amounts in which it is furnished, it is in substance 
essentially different. 

1 1 All the different contrivances practically adapted for the 
promotion of saving, among which life insurance is to be consid- 
ered one, are deserving of encouragement. They increase the 
capital of the community, indispensable for the organization of 
industrial enterprises, and aid powerfully in the development of 
the material wealth. Numerically the people of small means form 
a large part of the population, and their contributions, although 
humble singly, are in the aggregate of importance. Any accumu- 
lation of means which inures for their benefit is valuable, not only 
on account of the capital which it furnishes taken collectively, but 
also because it brings improvement to precisely the very people 
whose material condition stands most in need of it." And, 
finally, ' ' The further extension of life insurance in Massachusetts 
is no doubt a subject of so much importance, that it might very 
properly occupy the attention of the Legislature. But it is very 
doubtful whether the Legislature could devise any measures that 
would be of service, in aiding directly in the introduction of indus- 
trial insurance. Fashions, however, are so contagious that it is 
not unlikely that some attempt may be made to introduce here a 
kind of insurance at present so popular abroad. Should this be 
the case, it is highly desirable that legislation should establish all 
proper precautions against insolvency and fraud." 

The report of Mr. Clarke could hardly have become generally 
known until after the first half of the year 1874, for, as is usual 
with public documents, they are printed and distributed to the 
public some months after the close of the legislative session ; 
hence it is not strange that it was not until the latter part of the 



52 HISTORY OF THE PRUDENTIAL. 

year that a new and apparently energetic effort was made to 
carry the frequent suggestions of the hisurance Times and the 
more recent suggestions of Commissioner Clarke into actual 
execution. In the hisurance Times for October, 1874, is a notice 
of the proposed organization of a company contemplating the 
transaction of an Industrial business, which I quote as follows : 
1 * The appeal made by Commissioner Clarke, in behalf of the 
requirements of the industrial classes with respect to life insur- 
ance, has met with a prompt response from the capitalists of this 
city [New York]. Progress has already been made in the 
organization of a new life company, to be entitled the u Prudential 
Insurance Company of America," to be conducted on a plan 
similar to that of the Prudential of London, which has been 
attended with so much success and benefit to the indigent work- 
ing classes. ' ' 

Despite the preceding businesslike announcement, nothing 
seems to have been done to effect an organization, and there is no 
record that the company was ever incorporated and authorized to 
transact business, but there is a brief notice in the December 
number of Wit Insurance Times (1874), indicating that the pro- 
jected new company had difficulties, perhaps on account of its in- 
ability to raise the necessary capital of $100,000, with which it was 
proposed to organize. It would be interesting to know who were 
the promoters of the enterprise and why the same failed in its 
earliest stages without having had, at least, a fair trial, but there is 
no record of the names of those who made this second attempt to 
organize a Prudential Insurance Company of America, and thus, 
at the close of 1874, Industrial insurance was still a probability, 
but with every assurance of early realization. 

The report of Commissioner Clarke attracted considerable 
attention outside of Massachusetts, and came to the notice of 
Mr. John F. Dryden, who for some years had given considerable 
attention and thought to the study of Industrial insurance. Mr. 
Dryden must needs have been strongly influenced by so urgent a 
plea for the organization of an Industrial insurance company, 
coming from a source free from bias or prejudice, and from a 
man fully capable of dealing with so intricate and highly involved 
a subject. 

It is often argued that the unstinted praise of Industrial 
insurance, its methods and results, on the part of the press in 



INDUSTRIAL INSURANCE IN AMERICA IN 1 874. 53 

general, and the insurance press in particular, is due to the fact 
that the Industrial companies are advertisers in these journals, 
and that the latter are, therefore, interested advocates or special 
pleaders. Unwarranted as this opinion is, it has much semblance 
of truth, in that newspaper praise is, unfortunately, too often the 
result of a personal interest, while, conversely, newspaper fault- 
finding is too often the result of personal spite or prejudice ; but 
here we have overwhelming proof that before a single Industrial 
company was organized in the United States, the more intelli- 
gent insurance press, and especially the Insurance Times, devoted 
columns and pages to the discussion of the new form of life in- 
surance, which certainly brought not a cent of direct compensation 
to the owners or managers of this particular journal ; and we 
find the leading Insurance Commissioner of the United States, in 
1874, making a special plea in six pages of his report, long before 
an Industrial company had ever paid a dollar in taxes or license 
fees to the Department of Insurance of his State. Surely this 
may be accepted as proof that the system was early recognized as 
one of intrinsic value, and that it was advocated because it was 
likely to meet a large and increasing demand for life insurance 
by the industrial masses of that State. 

As another illustration of the earnestness and ability with 
which the editor of the Insurance Times advocated the establish- 
ment of an Industrial insurance company in the United States, I 
quote from an article which appeared in the October issue of 
that journal for 1874, which brings out with much emphasis the 
reasons which influenced the editor to devote so much space and 
time to the advocacy of the new form of life insurance in this 
country : — 

' ' The worthiest members of this class [the working people] 
have been betrayed continually by the most specious inducements 
to invest their little spare cash in associations and companies 
promising the most alluring profits and advantages imaginable. 
Their promises have been broken, and those that trusted in them 
have consequently been subjected to cruel loss and privation." 
And after quoting in full that part of Mr. Clarke's report which 
dealt with Industrial insurance, and to which was thus given a 
much-needed amount of publicity not usually accorded to a pub- 
lic document, the article continued: " There is, therefore, a 
great need of its adaptation to the wants of the laboring classes, 



54 HISTORY OF THE PRUDENTIAL. 

not by unreliable parties, but by those who would worthily com- 
mand the entire confidence of the people. * * * * To answer 
the purpose indicated, it is of no avail to introduce agencies of 
remote companies, however excellent, or to place the conduct of 
this business in the hands of persons not recognized by the pub- 
lic as leading men of the highest rank in the insurance world. 

* * * * The schemes already afloat and worked by men 
without repute, have only beclouded a fine opening, and rendered 
its prosecution more difficult by the disappointment and preju- 
dice which have been engendered by unsatisfactory experience. 

* # * * jf tfiQ duty of supplying the need of life insurance 
to the industrial classes were undertaken by a superior under- 
writer, at the head of a great life institution, they would dissolve 
like wreaths of mist in the blaze of the summer sun. ' ' 

Thus, after years of agitation, Mr. English, as editor of the 
Insurance Times, had reached the conclusion that it no longer 
was merely desirable that the business of Industrial insurance 
should be undertaken by a responsible company, but in the above 
sentence he speaks of the ' ' duty of supplying the need of life 
insurance to the industrial masses, ' ' and he concludes with the 
hope that the " suggestion of Commissioner Clarke, which almost 
assumes the form and urgency of an appeal, will meet a fitting 
response from some one of the master minds of the life under- 
writing fraternity." 




The PrudentialFriendetSociety 





HOME OFFICE OF 

the: prudential friendly society, 

1875-1878. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 55 



CHAPTER V. 

THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 

It is self-evident that the period of agitation and experiment 
had passed, and that the time for the foundation of an institution 
on the basis of the English Friendly Societies and the British 
Prudential had come with the new year, 1875. While Stephen 
English and others had pleaded and argued for the organization 
of an Industrial company, there were those who were strongly 
in favor of forming an institution more in harmony with the 
principles and practice of the Manchester Order of Unity and 
the Royal I^iver Friendly Society,* which combine a provision for 
aid in sickness with assurance for a sum sufficient for burial ex- 
penses in case of death. Many factors contributed to favor the 
latter form, not the least of which, if not the most important, 
must be considered the large amount of sickness prevailing in the 
large cities of the United States during the early seventies. As 
a rule the mortality was above 25 per 1 ,000 of population, often 
rising as high as 30 per 1,000 during a single year. The larger 
part of this excessive mortality was caused by zymotic diseases, 
and the disease prevalence was in general far in excess of that of 
the present time. 

What was generally true of most of the large cities of the 
East was true in particular of Newark, N. J., which at this time 
had a population of about 120,000, and held high rank as one of 
the most important manufacturing centres in the United States. 
The average death-rate of Newark for the period 1 872-' 75 was 
31 per 1,000 of population. Smallpox, typhoid fever, diphtheria, 
scarlet fever, and especially consumption were all excessively 
prevalent during this period. While the general mortality was 
high, the mortality at the younger ages was even more pro- 
nounced, the increase in the death-rate at ages under ten, for 

* This society no longer transacts a sickness insurance business. 



56 HISTORY OF THE PRUDENTIAL. 

instance, having been largely in excess of the increase in the 
population. 

Taking into consideration the fact that Newark was almost 
exclusively a manufacturing city, with a large proportion of its 
population depending on weekly wages, it is quite clear, to any 
one who has at all studied the relation of an excessive mortality 
to social welfare, that it was here, as in England (in Liverpool, 
Birmingham and Manchester), that the demand for Industrial 
insurance should first manifest itself in a most emphatic form, 
and, as we shall point out more clearly later on, it was from the 
large employers of labor that the first direct assistance came in 
the formation of a society and later on of a company as a remedy 
for the ills resulting from social burdens beyond the strength of 
the average individual workman. 

It is much to be regretted that data are wanting as regards 
the actual amount of pauperism and poverty prevailing in Newark 
at this period, but, from census returns and other fragmentary 
data, it is evident that pauper funerals were exceedingly common 
in Newark during the early seventies. For New York City, 
where conditions were even worse than they were in Newark, 
actual data as to pauper funerals are available, showing that the 
rate of such funerals per 10,000 of population was 33.1 during 
1 870-' 74, against an average rate of only 22.0 during the five 
years 1 895-' 99. Hence, it is shown that not only were pauper 
funerals exceedingly common during the years preceding the 
establishment of Industrial insurance, but since that date a 
material reduction in number has taken place. 

Such conditions as have been pointed out are likely to prove 
an incentive for the development of plans tending towards im- 
provement by the application of insurance principles, which aim 
to do away with the necessity of a demand for public charity from 
an otherwise able and intelligent body of workingmen, making 
worthy efforts to solve life's problems in their own way and 
within the limits of their means. 

It was to Newark that Mr. John F. Dry den had come, in 
J 873, with the purpose of launching his new scheme of working- 
men's insurance. Surely he could not have selected a more 
appropriate locality, a better city for a trial of his new ideas in 
life insurance and finance, and a more promising field for the 
first application of English principles of Industrial insurance to 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 57 

American social and economic conditions. Time has proved that 
the selection of Newark was a most wise one ; time has proved 
that Mr. Dryden was right in his conception of the future possi- 
bilities of Industrial insurance on American soil. 

Mr. Dryden had for some years devoted much time and 
study to the question of life insurance for workingmen and their 
families, his attention to this branch of the business having been 
attracted by the report of Klizur Wright on the methods and 
condition of the British Prudential. On digesting these com- 
mentaries of Mr. Wright and Mr. Gladstone, Mr. Dryden did not 
take their conclusions for granted, but procured all the reports 
and data of the English company and the British Friendly Socie- 
ties, and after a careful study of the facts concluded that Mr. 
Harben and the English people were right, and that Mr. Wright 
and Mr. Gladstone were in error. 

Satisfied that the business was deserving of a trial, when 
modified to meet American social and economic conditions, Mr. 
Dryden first submitted his plans to some people in his native 
State (Maine), but no encouragement was given for a practical 
demonstration of his ideas. Not discouraged, he had come to 
Newark in 1873, and, after interesting a few people in the matter, 
had a bill passed by the Legislature, chartering The Widows' and 
Orphans' Benefit Society, but, as has been pointed out, nothing 
substantial came from this effort, an effort too much in harmony 
with the prevailing idea of providing workingmen' s insurance on 
the "Bund" or "Union" plan. After a brief experiment, it 
was found necessary to alter the original plans, and in the spring 
of 1875 the charter of The Widows' and Orphans' Benefit Society 
was amended so that the name of the society was changed to 
that of The Prudential Friendly Society, which, in 1877, by 
another amendment became The Prudential Insurance Company 
of America. 

Among the incorporators of the society were many leading 
merchants and manufacturers, who, according to a sketch in the 
Newark Standard, ' ' had been daily called upon for subscriptions 
to bury the poor or furnish aid in sickness and distress." It 
was well for the new enterprise that men of exceptional ability 
and known integrity and experience should have been drawn into 
the formation of the new insurance project, since the frequent 
failures of so-called Aid Societies or Fraternal Societies, parading 



58 HISTORY OF THE PRUDENTIAL. 

under the guise of high-sounding titles and often supported by 
names well known in the world of finance and commerce, had 
only too often fallen far short of their promises and shamefully 
betrayed a most sacred trust. 

It will be recalled in this connection, how earnestly and per- 
sistently the Insurance Times, in its frequent articles in favor of 
the organization of an Industrial insurance company, had insisted 
that ' ' It is all-important that whoever undertakes it should stand 
so high as to command the entire confidence of the people, and 
be able to gather about him a corps of coadjutors and subordi- 
nates who would work with him with intelligence, zeal and 
industry, incapable of despair, flagging or failure. ' ' 

It was, therefore, most fortunate for the cause of genuine 
workingmen's insurance that from the outset the new organiza- 
tion had the moral and material support of the very best com- 
mercial and financial element in the city of Newark. In a 
notice of the actual commencement of business operations by 
The Prudential Friendly Society, the Newark Evening Courier of 
November 13, 1875, referred to the managers of the society as 
follows : ' ' The gentlemen who have the management of this 
important and humane enterprise are too well known in Newark 
to require our endorsement. Their names are a synonym for 
financial strength and integrity, and our people know that funds 
entrusted to an organization which is under such control will be 
guarded with sacred care." The Newark Register of the same 
date referred to the society in the following words : ' ' One of the 
most gratifying facts connected with this society is its strength 
and security," and it " may be said to be founded upo?i a rock," — 
a rather curious coincidence, considering the fact that the motto 
of the Company, ' ' The Prudential has the strength of Gibraltar, ' ' 
became, in course of time, a household word. 

While the charter of the society had been supplemented on 
February 18, 1875, which must be considered the date on which 
Industrial insurance had its beginnings in the United States, it 
was not until November 10, 1875, that the actual business opera- 
tions commenced, and it was on this day that the first application 
was written on the life of the then cashier of the German Bank, 
Mr. W. R. Drake. The name of John F. Dryden, the first 
secretary of the society, appears as a witness to the application, 
which is reproduced in full on the opposite page. 



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THE PRUDENTIAL FRIENDLY SOCIETY, 



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NOVEMBER IO, 1875. 



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THE PRUDENTIAL FRIENDLY SOCIETY, 1 875. 59 

Before taking account of the events following this actual 
commencement of business operations, it is necessary to consider 
briefly the general facts relating to the period which had elapsed 
from the time the charter of The Widows' and Orphans' Friendly 
Society had been amended on February 18th, to November 10th, 
when the first application for membership in The Prudential 
Friendly Society was made. 

During the month of January, 1875, the discussion and 
public consideration of Mr. Wright's savings-bank plan contin- 
ued, and much attention was given to his many publications on 
the subject, especially his bitter attacks on regular level-premium 
life insurance. The Boston Board of Trade took the matter into 
consideration and proposed ' ' to inaugurate a new movement in 
life insurance," which, had it succeeded, it is not too much to 
say, would have made Industrial insurance unnecessary and im- 
possible. The Board of Trade unanimously approved the plan of 
Mr. Wright and recommended that the same should be tried on 
the ground that ' ' the people who most need life insurance can not 
well afford the luxury of the agenc}^ expenses of the present sys- 
tem." It will be observed that this was in direct opposition to 
Mr. Wright's earlier plea, that the agency system was indis- 
pensable to the extension of life-insurance principles to the masses. 
It had been further recognized by this time, in the words of the 
Monitor, that ' ' any man who knows anything about life-insur- 
ance companies understands perfectly well that soliciting agents 
are their motive power." While something was to be said in 
favor of Mr. Wright's scheme, the people at large, and especially 
those best informed in the science and practice of life insur- 
ance, were opposed to his project on the ground of its utter 
impracticability, and the opposition is best expressed in the words 
of a member of the Massachusetts Legislature, who, in explana- 
tion of the reason why the Legislature had refused Mr. Wright a 
charter for his proposed company, said that " Mr. Wright's plan 
was looked upon as impracticable, very ingeniously contrived, 
but wholly without motive power," since, as has been stated, it 
was proposed to employ no agents to acquaint the public with the 
merits of the scheme by a direct canvass, such as is made by 
Ordinary and Industrial companies. 

While this discussion was engaging the attention of the people 
in the Eastern United States, an effort was made in Hamilton, 



60 HISTORY OF THE PRUDENTIAL. 

in the province of Ontario, Canada, to organize an Industrial 
company on the plan of the British Prudential, by the name 
of The Industrial and Commercial Life Insurance Company, 
but, as far as I have been able to learn, practically nothing 
was accomplished, and no actual business was ever transacted. 
This fact is of interest merely as an indication of the growing 
demand for Industrial insurance in all parts of the country. 
The great English company continued to attract attention on 
this side of the Atlantic, and its success as recorded in. the 
insurance journals must have offered tempting inducements to 
American insurance managers to try the same experiment. 
The report of the British company for the year 1874 had stated 
that there had been issued during that year the almost incompre- 
hensible number of 888,758 Industrial policies, against 646,377 
policies issued during 1873. The returns of the company were 
extensively commented upon, and led the Insurance World (1875, 
p. 82) to remark that the system of Industrial insurance is yet 
" in its chrysalis state in this country," which was strictly true, 
for Mr. Dryden and his associates were working almost day and 
night to perfect the organization of a society which in time was to 
prove the first successful Industrial insurance company of Ameri- 
can origin to be operated on the plan of the British Prudential. 

As has been stated, Mr. • Dryden had had the subject of 
Industrial insurance under consideration for some years, and had 
not only made himself familiar with the leading principles and 
features of the system of the British Prudential, but he had also 
carefully considered and studied the plans of the English Friendly 
Societies, and in particular the Manchester Order of Unity, and 
the Trading Societies, like the Royal Liver, of Liverpool, the 
latter of which made a specialty of burial insurance for all the 
members of a family. With the object of developing in the United 
States a new form of workingmen's insurance, which would com- 
bine all the virtues of the old plans, while eliminating, as far as 
possible, the weak points, which had been the cause of so many 
disastrous failures, Mr. Dryden secured all the available informa- 
tion from England, entering at the same time into correspondence 
with Neison and Ratcliffe, the highest authorities on Friendly 
Society practice of this period. 

The one broad fact which remained with Mr. Dryden as 
the result of his study and investigation must have been the 



THE PRUDENTIAL FRIENDLY SOCIETY, 1 875. 6l 

conclusion pre-eminent in the minds of all English students of 
the subject of Friendly Society practice and finance, namely, 
that an actuarial basis was the first requisite to make possible the 
success of an undertaking of this kind, and with this thought in 
mind, Mr. Dry den entered into communication with Mr. John K. 
Clark, Professor of Mathematics at Yale College, who seems to 
have made himself thoroughly familiar with the actuarial and 
financial basis of life contingencies. 

From letters of Mr. Clark addressed to Mr. Dry den, during 
the months preceding the actual commencement of business opera- 
tions, I make a few extracts, as likely to prove of more than 
passing interest and importance to the student of Industrial 
insurance history. 

In his first letter to Mr. Dry den, dated March 26, 1875, Mr. 
Clark referred to the dearth of information on the subject of insur- 
ance, and especially on sickness and mortality, in the possession 
of Yale College, and intimates that his knowledge of the subject 
has been practically confined to a study of Neison's work on 
Vital Statistics. Influenced, no doubt, by the investigations of 
Neison, the great value of which is recognized even at the 
present time, Mr. Clark seems to have devoted considerable atten- 
tion to the question of the possibility of successfully transacting a 
sickness insurance business, and in a letter dated April 26th, he 
reported to Mr. Dryden that in consequence of his preliminary 
investigations he could safely recommend the adoption of a plan 
for the transaction of a sickness, burial and pension scheme, and 
that, ' ' with strict attention to well-established principles and to 
detail of administration, it can, in my opinion, be transacted 
safely, and, if the demand for it be good, with a fair return to the 
stockholders." He, however, recognized the inadequacy of the 
data at his command, and in reference to sickness benefits stated 
that, ' ' by going into operation cautiously upon the basis of this 
experience, you will be able to gather in your office an experience 
of your own, which will, after a time, furnish such checks and 
modifications as maybe desirable," and in still another letter, 
dated April 30th, Mr. Clark repeated his words of caution in 
reference to the sickness branch of the business, stating that 
1 ' this branch of the business should be particularly studied. ' ' Sub- 
sequent experience proved for this country, as it had been 
true for England, that a sickness benefit business can not be 



62 HISTORY OF THE PRUDENTIAL. 

safely transacted by an insurance company. It is absolutely im- 
possible to guard against sham sickness, imposition and fraud 
in other directions, and all calculations, on no matter how ac- 
curate a basis, will prove inadequate in practice. In conse- 
quence, a few years later, The Prudential Insurance Company 
discontinued the transaction of sickness insurance, after this 
branch of the business had been given a sufficiently extensive 
trial to prove that it could not be safely and profitably transacted, 
and that the demand for this form of insurance protection was 
much less than had been anticipated, increasing preference being 
given to life insurance for burial or investment purposes. 

Another point receiving considerable attention before the 
actual business operations had commenced, was the probable and 
proper expense-rate of a life-insurance business to be transacted on 
the weekly- or monthly-payment plan, and, while this question in a 
manner demanded considerable actuarial consideration and treat- 
ment, it was still very largely a practical one, demanding the 
taking into account of the conditions under which the business 
had to be carried on, namely, by a house-to-house canvass, and 
the subsequent collection of weekly premiums from the houses of 
the insured. Mr. Dryden from the outset insisted upon a load- 
ing of the premiums sufficient for the safe transaction of the busi- 
ness, holding to the belief that ' ' it would be very easy to make 
an equitable return to the policy-holder if an overcharge had 
been made," and he further especially insisted upon safety and 
permanency, rather than yield upon a point which might have 
brought more rapid success during the first few years, but have 
imperiled the future existence of the society ; and in these views, 
Mr. Dryden was fully sustained by Mr. Clark, who, after a 
lengthy discussion, conceded that — " I shall proceed to carry out 
your views cheerfully, and the latter, I am sure, do not appear to 
me in any sense unreasonable from your point of view ' ' ; and in 
closing his letter of June 16th, Mr. Clark added that " in any case 
of doubt in such matters action should, of course, keep well on 
the side of safety, and this maxim I have constantly considered 
in my recent calculations. ' ' 

In a letter dated June 4th, Mr. Clark makes reference to Mr. 
Dryden 's careful selection of men of ability and prominence as 
directors and stockholders in the new enterprise, a matter of the 
greatest possible importance, and one of the formative influences 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 63 

making for the future success of the company. Mention has 
already been made of the fact that among the incorporators of the 
society were men of wealth and influence, merchants and manu- 
facturers of the city of Newark, and Mr. Clark incidentally refers 
to the matter in stating that ' ' your plan for reaching the different 
industries through the selection of your directors seems a good 
one, and you do not seem to be unwise in not hastening too much 
the completion of your Board. ' ' Anxious as Mr. Dryden must 
have been to commence active operations, he, nevertheless, with 
a characteristic spirit of patience and conservatism, refrained 
from making haste at the most critical period of the history of 
the society, which was to be the future Prudential Insurance 
Company of America. 

It is thus apparent that every step taken by Mr. Dryden 
had been carefully considered, and it was not until July that Mr. 
Clark was able to forward the completed calculation of rates for 
the sickness and annuity branch of the business, and on July 10th 
the life-rates for the burial branch. In transmitting his sickness 
calculations he once more emphasized the importance of dealing 
cautiously with this part of the business, and at the same time 
pointed out most of the observed dangers pertaining to this form 
of insurance as carried on by the Friendly Societies in England. 
Mr. Clark carefully went over the whole ground, so ably discussed 
by Finlaison, Neison and others, and concluded his recommenda- 
tions with the advice that ' ' an actuarial valuation of each branch 
of the business should be made, if possible, once per annum, and 
that the first of these valuations should be made at least within 
a year after the business had well gotten under way. ' ' To this 
advice, which is clearly indicative of a thorough comprehension 
on the part of Mr. Clark of the difficulties incident to the suc- 
cessful transaction of an Industrial insurance business, he added 
the further advice, which deserves to be remembered as the very 
foundation of the massive and colossal structure of present-day 
Industrial insurance, and for the disregard of which so many 
thousands of so-called fraternal or co-operative schemes have 
come to an untimely end: "Meanwhile, as at all times, your 
directors should be impressed with the importance of keeping 
sacredly the proper reserve on all your policies, so that if your 
business is successful, as I most sincerely hope it may be, you 
may secure constantly increasing confidence; and if in the worst 



64 HISTORY OF THE PRUDENTIAL. 

event it should chance to be at all unsuccessful, it may at least 
not end in dishonor. ' ' Such were the foundation principles on 
which Industrial insurance in the United States was established 
by The Prudential, which in a brief quarter of a century became 
known to every one, old and young, as ' ' the Company which has 
the strength of Gibraltar. ' ' 

Another evidence of the painstaking efforts of Mr. Dry den, 
in giving consideration to every possible theoretical or practical 
aspect of the problem of workingmen's insurance, is found in a 
letter of Mr. Clark, dated August 24, 1875. Mr. Dryden seems 
to have called Mr. Clark's attention to an article in the New York 
Tribune on " Life Insurance for Workingmen," which may pos- 
sibly have been suggested by an address of Elizur Wright on 
' * Life Insurance for the Poor, ' ' delivered at the annual meeting 
of the National Social Science Association at Detroit, Mich., on 
May 13, 1875. In the Tribune article a strong argument had 
been made for life insurance for the masses, and I can not but 
think it of value to give a few extracts from a now inaccessible 
plea for workingmen's insurance on the Industrial plan in the 
United States. 

The Tribune had said as follows : ' ' The policies that work- 
men take at best are small, and the payments of premiums are 
divided as much as possible ; hence the shop and the factory offer 
an unprofitable ground to the canvassers [for Ordinary insurance] , 
who get a commission on paid premiums only, consequently life 
insurance is not brought home to the workingman by personal 
effort, as it is to other classes in this country. This, then, is the 
difficulty to be surmounted. That it is not impossible is shown 
by the enormous business of an English company [the Pruden- 
tial] which makes workingmen's policies a specialty. In Great 
Britain the insurance companies have found out how to insure 
the workingman ; our companies have not. In these times, while 
the business of life insurance is dull, and agents find it hard work 
to earn a living, it might be worth while to study the system 
adopted abroad. Insurance for workingmen in this country offers 
an opening into fresh fields and pastures. ' ' 

In his remarks at the Detroit meeting of the Social Science 
Association, Mr. Wright had discussed the subject from an en- 
tirely different standpoint, expressing the belief that, by means 
of his family bank, it was possible to introduce " self -solicited ' ' 



THE PRUDENTIAL FRIENDLY SOCIETY, 1 875. 65 

life insurance for the industrial masses of the United States. As 
has previously been pointed out, his efforts in this direction proved 
a complete failure, and such companies, especially the Provident 
Savings Assurance Society, as adopted his suggestion to trans- 
act business without agents, were soon compelled to abandon the 
plan and revert to the universal method of soliciting insurance by 
direct personal canvass, the necessity of which had been pointed 
out as early as 1853 by Tuckett in his insurance journal, to which 
previous reference has been made. However, there was one 
remark of Mr. Wright which deserves to be placed on record, and 
that is, his opinion that, ' ' to adapt life insurance to the poor, 
it should be reduced to the utmost simplicity, so as to be within 
the comprehension of the humblest capacity. ' ' It may safely be 
said for Industrial insurance that it fully and completely came up 
to this demand, and to this fact it owes no small amount of the 
success which has since been attained. 

As an indication of the small extent to which life insurance 
had been made accessible to the masses, it may be pointed out 
that, according to a report made in 1875 by the Massachusetts 
Bureau of Labor Statistics, * out of 397 workingmen's families 
which made returns of their expenditures, only a single working- 
man's family paid an annual premium of $18 for insurance 
purposes. While practically nothing was expended for life 
insurance, a disproportionate part of the income was expended 
for charities and societies, and it is not too much to say that by 
J 875, workingmen's insurance was practically limited to secret 
organizations or co-operative benefit societies, most of which, at 
best, provide only temporary insurance for a small number, who 
receive benefits during the existence of the organization, an ex- 
istence which is usually limited to a generation as its maximum 
period of possible usefulness. 

In marked contrast to the investigations in Massachusetts in 
1875, the investigations made by the Aldrich Senate Finance 
Committee on ' ' Retail Prices and Wages, ' ' and also by the 
Michigan and Indiana State Bureaus of Labor, prove that, at the 
present time, life insurance forms a very considerable element in 
the expense-rate of workingmen's families, and this result, it may 
with confidence be asserted, must be attributed largely to the 

* Mass. Labor Report, 1875, p. 435. 



66 HISTORY OF THE PRUDENTIAL. 

missionary work carried on by Industrial insurance companies in 
behalf, not only of Industrial insurance, but also of other forms 
of insurance, savings and thrift ; and it may not be out of place 
in this connection to state that in 1875, although there were then 
in the State of Massachusetts some 720,639 of savings-banks 
depositors, with an average deposit of $330, it was officially 
pointed out by the Labor Commission of that State that ' ' the 
fact remains that the English Government aids fewer paupers in 
proportion to population than our own;' ' * 

Attention may here properly be called to a point of more 
than passing importance, in view of present-day attacks on 
Industrial insurance as a method by which the poor are encour- 
aged to expend extravagant sums for funeral purposes. While 
the charge in itself is so absurd that it hardly needs refuta- 
tion, in view of the self-evident fact that the amounts realized 
are, as a rule, hardly sufficient to meet the funeral expenses and 
the cost of the last illness, it may be of interest to call attention 
to an article in the September number of the Insurance Times for 
1875, in which the question of funeral expenses and funeral pomp 
was discussed and from which I make the following extract : "It 
is impossible to pay a visit to any of our cemeteries when funerals 
are going on, without experiencing not only a kind of shudder at 
the whole paraphernalia of the undertaking business, but also a 
feeling of pious grief at the thought of the silly trammels of cus- 
tom, in which all classes of society are bound, in the matter of 
funeral pomp ; and the wanton extravagance which sets up in 
admired disorder, full of endless repetitions, monumental effigies, 
and thousands of silly sentiments embodied in stone and marble, 
some of which are, even like the inverted torch, purely heathen." 

This article is of exceptional interest in view of latter- 
day discussions in which the charge has been made that the vast 
extension of Industrial insurance has been responsible for the 
asserted increase in funeral pomp and funeral expenditure. It 
will be observed that before a single Industrial policy had been 
written funeral expenditures were sufficiently extravagant to call 
for public condemnation, and that it is therefore shown that 
public opposition to funeral extravagance antedates the estab- 
lishment of Industrial insurance in the United States. 

* Mass. Labor Report, 1875, p. 211. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. &7 

By October, 1875, three-quarters of the year had passed, and, 
as far as the public knew, no definite steps had been taken to 
establish an Industrial insurance company in the United States. 
There is, however, record of an attempt made in Washington, 
D. C, during the early part of the year, when an effort seems to 
have been made to establish an Industrial insurance company, but 
like the Industrial and Commercial, of Hamilton, Ontario, noth- 
ing substantial seems to have been the result, and there is no 
proof that the proposed company ever actually transacted 
business. 

The Insurance Times, with a persistency fully worthy of the 
cause, continued its pleadings in favor of such an undertaking, 
and in the October number for 1875 appeared another excellent 
article, under the title ' ' Life Insurance for Those Who Need It 
Most, ' ' from which I quote a few passages : ' ' Who need life insur- 
ance most ? The poor, or the rich ? The families who are entirely 
dependent upon the daily or weekly earnings of their head, or 
those who have other sources of maintenance ? Life insurance is 
good for the rich and the ' well-to-do, ' but it should be looked 
upon as indispensable to the poor. The complaint is general, 
however, that life insurance fails to reach those who most need it, 
and upon whom it is calculated to confer the greatest benefit. 
The family of the poor man, that ought to be protected by life 
insurance, is seldom or never shielded by a life policy." 

Referring to the efforts that had been made to transact an 
insurance business by means of ' ' Bunds ' ' or similar organiza- 
tions, the Insurance Times stated that ' ' Some abortive efforts 
have been made in this direction, but, as we predicted from the 
first, they failed and came to nothing, because they were not 
made by persons of the right quality and calibre. We regret, for 
this reason, to see men unequal to the task undertake it ; and to 
see others, whose talents, standing and influence fit them for the 
work, waste their powers in attempting the achievement of impos- 
sibilities. * * * * If such gifted and eminent actuaries as 
Elizur Wright, Sheppard Homans, and some few other leading 
life insurance minds, would employ their great knowledge, trained 
ability and wide influence, to promote the extension of life insur- 
ance to the hard-working and industrial classes, instead of devot- 
ing their talents and labor to the development and introduction of 
pet theories, however ingenious and attractive, they would render 



68 HISTORY OF THE PRUDENTIAL. 

humanity a great and lasting service, in the blessings of which 
millions would be partakers for ages to come. 

* • The regular, rapid and solid growth of a system of indus- 
trial insurance, or life insurance for the poor, would have an 
almost unlimited scope and usefulness, and the prospect it 
presents ought to kindle in great and benevolent minds a 
noble ambition to promote its spread and establishment. We 
have no desire to insist upon a servile adherence to the system 
of the Prudential of England, which has achieved so much suc- 
cess in this field of insurance, but its plans are certainly deserv- 
ing of careful study, and its prosperous example is full of 
inspiriting encouragement. It insures the life of even the 
day laborer, and collects of him a weekly premium of a penny. 
# # * * ij. i s f oun d that industrial insurance is in every 
way, directly and indirectly, a benefit to the poorer classes. It 
helps to train them to habits of saving and foresight, and illus- 
trates, in the most practical manner, the advantages of making a 
provision for the future. ' ' 

These few extracts from a most excellent article will suffice 
to indicate the increasing knowledge and comprehension of the 
principles of Industrial insurance, and it would seem that by 
October, 1875, the commencement of actual business operations 
could no longer be postponed. But the year 1875, about the 
middle of the financial depression, extending from 1873 to 1878, 
was not one in which it was an easy matter to organize a financial 
enterprise on a solvent and substantial basis ; and while the outlook 
for a successful undertaking in the domain of life insurance 
was very promising, it was nevertheless a most serious matter 
to overcome local difficulties and to secure the necessary finan- 
cial support, and I may recall the remarks in the Insurance Times 
(October, 1875), to the effect that for such an undertaking it re- 
quired a man and a mind that ' ' should stand so high as to com- 
mand the entire confidence of the people, and be able to gather 
around him a corps of coadjutors and subordinates who would work 
with him with intelligence, zeal and industry, incapable of despair, 
flagging or failure. " It is something very considerably to the 
credit of Mr. Dryden that at this trying time he was able to meet 
this requirement in the selection of a Board of Directors and a 
"corps of coadjutors and subordinates," many of whom are still 
connected as executive officers with The Prudential Insurance 





AftftrtiJ^ 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 69 

Company at the present time. It is impossible in a work of this 
kind to do justice to the great services which were rendered Mr. 
Dryden by his early associates at this critical period of Prudential 
history, but brief mention must be made of the invaluable assist- 
ance rendered the cause of Industrial insurance by Dr. Leslie D. 
Ward and Mr. Noah F. Blanchard. It was largely in consequence 
of Dr. Ward's untiring efforts that a strong Board of Directors 
was secured for the Society and that the necessary financial support 
was obtained from men whose commercial standing in the com- 
munity was second to none. Dr. Ward was at the time a prac- 
ticing physician with a large private practice, in which he had 
obtained an insight into the life of the people and had become 
familiar with their most urgent wants. In a similar manner Mr. 
Blanchard, as a large manufacturer and employer of labor, had 
learned by personal experience of the existing need of some 
institution likely to accomplish the purpose for which The Pru- 
dential had been designed. Mr. Blanchard became actively inter- 
ested in the affairs of the Society and incorporated into its business 
operations the same principles which had been the cause of his 
earlier successes in other commercial enterprises, and in the logic 
of events he succeeded to the Presidency in 1879, which position 
he held until his death in 1881. Dr. Leslie D. Ward was elected 
Vice-President in 1884, which position he holds at the present time. 
All discouragements and difficulties notwithstanding, The 
Prudential Friendly Society by November 6, 1875, was at last in 
a position to commence business, and it is but proper that I should 
here give in full the directorate of the Society, as I find it stated 
in the Newark Daily Advertiser of November 18th : — 

NEWARK DAILY ADVERTISER. 



Thursday Evening, November 18, 1875. 

The Prudential Friendly Society, 812 Broad Street, Newark. 
(State Bank Building.) 

DIRECTORS. 

Horace Ailing, James M. Durand, George Richards, 

Benjamin Atha, Isaac Gaston, William Robotham, 

Allen L. Bassett, Albert O. Headley, Chas. W. A. Roemer, 

Noah F. Blanchard, Andrew Hopper, Edgar B. Ward, 

Chas. G. Campbell, Henry J. Yates, Leslie D. Ward, 

Aaron Carter, Jr., Alfred Lister, Marcus L. Ward, Jr., 

William R. Drake, George D. G. Moore, William Whitty, 

John F. Dryden, Wm. H. Murphy, Elias A. Wilkinson. 

Ar,r,EN L. Bassett, President. 

John F. Dryden, Secretary. 



70 HISTORY OF THE PRUDENTIAL. 

It will be observed that Mr. Dryden had been made the Secre- 
tary of the Society, while Mr. Bassett had been elected President. 
Although Mr. Bassett had been somewhat interested in insurance 
problems and had been connected with the earlier effort of the 
Widows' and Orphans' Friendly Society, he had not in any man- 
ner contributed directly to the organization of the new Society ; 
all of the original work, especially the correspondence with Mr. 
Clark, had been carried on by Mr. Dryden, who, as a matter of 
course, had to associate with himself men of capital and ability 
to carry on so difficult an enterprise as a new insurance organiza- 
tion on a substantial basis in the middle of the financial depression 
of 1 873-' 78. During the few years of his administration Mr. 
Bassett failed to give satisfaction to the Directors, and in May, 
1879, resigned. He was succeeded by Mr. Noah F. Blan chard, a 
man of exceptional administrative ability, at whose death, in May, 
1 88 1, Mr. John F. Dryden was unanimously elected President, 
which position he still occupies. 

For the purpose of acquainting the public with the special 
features of the new plan of insurance, a prospectus of the Society 
had been issued, which contained many features which were novel 
and attractive, while, at the same time, the plan was set forth in a 
plain and straightforward manner, so much so that the enterprise 
at once attracted considerable public attention, giving rise to many 
editorial discussions in the public prints. The following are the 
most important features referred to at length in the prospectus : — 

The Prudential Friendly Society offered insurance against 
sickness and death, as well as a provision for support in old age 
for persons of either sex from infancy to old age. 

The Society required no medical examination and promised 
to pay all claims immediately after the filing of proper proofs of 
death or sickness. 

Contributions were principally to be made on the weekly- 
payment plan, but many of the benefits of the Society could also 
be obtained upon the monthly, quarterly, or semi-annual payment 
plan, according to the tables of the Society. 

As a check upon imposition and fraud it was set forth in the 
prospectus that ' ' A member will not be entitled to recover from 
the Society on account of sickness or death happening before 
three months' membership, or in case of sickness, except from the 
day on which the Society, is notified." 



THE PRUDENTIAL FRIENDLY SOCIETY, 1 875. 



7* 



The amounts for which insurance could be made were 
limited to $25 a week in case of sickness, and to $500 in case of 
death. 

The following is an abbreviation of the first adult rate table 
used by the Society : — 

FIRST ADULT RATE TABLE USED BY THE PRUDENTIAL 
FRIENDLY SOCIETY. 

Amounts Payable at Death for a Weekly Premium of 



Age Next 


5 


10 


15 


20 


25 


Birthday. 


Cents. 


Cents. 


Cents. 


Cents. 


Cents. 


II to 15 


$100 00 










16 to 20 


125 00 


$250 00 








25 


IIO OO 


220 OO 


$330 00 


$440 00 




30 


94 OO 


188 00 


283 OO 


378 00 


$472 00 


35 


80 OO 


160 00 


240 OO 


320 OO 


400 00 


40 . 


66 00 


132 OO 


200 OO 


267 OO 


334 00 


45 


54 00 


108 00 


164 OO 


219 OO 


274 00 


50 




88 00 


133 OO 


177 OO 


221 00 


55 




70 OO 


105 CO 


140 OO 


175 00 


60 




54 00 


81 OO 


109 OO 


136 00 


65 




. . 


62 OO 


82 OO 


104 OO 


70 




. . . . 


. . . . 


62 OO 


78 00 


75 




.... 






57 00 



No benefit will be payable until certificate has been in force three 
months. Contributions payable during life. Benefits payable only at death. 



To the preceding table must be added the following extract 
from the prospectus explaining the methods of payment and 
objects to be realized : — 

' ' The Society will use the utmost promptness consistent 
with safety in the payment of claims. In the event of sickness, 
benefits will be paid from week to week while sickness lasts. 
In event of old age, benefits will be paid on a fixed day of 
each month. In event of death, benefits will be paid immediately 
after proper proofs are filed with the Society, in order that the 
money may be available at once for funeral expenses." 

As has been stated, the Society from the start made the bene- 
fits of life insurance accessible to persons of all ages, a special 
infantile table having been constructed, of which the following is 
an abbreviated copy, and to which I have added such extracts as 



72 



HISTORY OF THE PRUDENTIAL. 



are contained in the original prospectus. It will be observed that 
the lowest premium accepted was three cents, and the table there- 
fore is based on this minimum premium : — 

For Three Cents a WEEK, Twelve Cents a MONTH, Thirty-Five 
Cents a QUARTER, Sixty-Five Cents SEMI-ANNUALLY, or One 
Dollar and Twenty-Five Cents ANNUALLY, the Prudential 
will pay at the Death of a Child as follows : — 



Age of Child 

when Admitted to 

Membership.* 


Amounts Payable After 


Three Months. 


One Year. 


1 


$IO OO 


$12 50 


2 


IO OO 


12 50 


3 


IO OO 


15 OO 


4 


12 50 


17 50 


5 


15 00 


20 OO 


6 


17 50 


25 OO 


7 


1 20 00 


30 OO 


8 


25 00 


40 OO 


9 


30 OO 


50 00 



If the child should die within three months from date of admission 
to membership, no Benefit will be payable. 

This table was so arranged that the insurance increased from 
year to year with increasing age, while the premium remained 
the same, this being necessary in view of the well-known fact 
that the rate of mortality is highest at birth, gradually declines 
until about ages twelve to thirteen, and after that constantly 
increases to the highest attainable age. Thus it will be observed 
that the principles of actuarial science were made applicable to 
the most complicated part of the business. 

The aims and objects of the Society are fully set forth in 
that part of the prospectus which dealt with the ' ' Plan of the 
Prudential, ' ' where it is stated that ' ' It is the special aim of this 



* It was at first the practice to consider the age last birthday as the age 
at entry, hence age one is included in this table. Under the present prac- 
tice of considering the age next birthday age two is the first to find a place 
in the infantile table. It has never been the policy of the company to 
accept risks at ages below one for reasons which have been discussed in 
other parts of this work. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1 875. 73 

Society to enable people of small means to provide themselves 
with relief in sickness or accident ; second, for a pension in old 
age ; third, for an adult burial fund ; fourth, for an infant burial 
fund. The contributions charged for the above-named bene- 
fits have been computed by eminent actuaries of America and 
England, and are such as careful study and close calculation have 
shown to be equitable and necessary. They are as low as the 
Society can afford, for the benefits granted, and are high enough 
to make it safe. ' ' 

Of the above-named four distinct branches, the first, as has 
been stated, was discontinued after a few years of actual expe- 
rience, as had been the case with the English companies attempt- 
ing to transact a sickness insurance scheme on a large scale. 
The second failed to meet with public favor on account of the 
inherent difficulty of obtaining so desirable an object as independ- 
ence in old age by the payment of the small sums which the 
working people of the period could afford to devote to the 
accumulation of a fund sufficient to yield a substantial annuity in 
old age. The third and fourth branches became in time the all- 
important parts of the business, experience having demonstrated 
that the demand for a sum payable at death was greater than the 
demand for other insurance features, however desirable in them- 
selves. 

The Prudential Friendly Society was thus plainly what it 
was designed to be, an Industrial insurance company on the plan 
of the British Prudential, with such modifications and slight 
changes as seemed desirable at the time to make the plan attract- 
ive to the American working people. In the prospectus it had 
been clearly stated that ' ' The Prudential is designed for persons 
of limited means," and that "Its benefits may be secured by cutting 
off some luxury which can be dispensed with without injury to 
health or Jiappiness. ' ' It was never the plea of Industrial insur- 
ance companies that they were soliciting the risks of paupers 
or the lowest poor, but from the start they made an effort to 
reach the industrial masses — if it be so, the industrious poor ; 
but in their efforts to obtain business, in their efforts to insure 
as large a proportion of the population as possible, they never 
failed to keep in mind the early principle of the Prudential, 
that ' ' The benefits of Industrial insurance may be secured by 
cutting off some luxury which can be dispensed with without 



74 HISTORY OF THE PRUDENTIAL. 

injury to health or happiness," and, I may add, without detri- 
ment to habits of thrift in other directions than insurance. For 
even at this time, before a single application had been accepted, 
it had been recognized by Mr. Dry den, and was so stated in 
the first prospectus, that ' ' A membership in the Prudential will 
induce prudence and economy, and become the foundation of 
good habits," as "It may be the means of saving an individual 
or family from a fate worse than death. ' ' In these after-years, 
when so much has been said and written on the question of the 
possible evil effect of this system of insurance on the morals and 
manners and material welfare of the people, it is well to recall 
these simple straightforward statements, which were thus incor- 
porated into the foundations of Industrial insurance in America, 
and which are to-day its strongest claim to public favor, as they 
have for twenty-five years been the strongest inducement to the 
industrial masses to keep the millions of policies in force on the 
books of the Industrial companies. 

Having pointed out the grounds on which the Prudential 
Friendly Society from the very beginning rested its case, it may 
not be out of place to refer at some length to the public approval 
of the introduction of Industrial insurance in the city of Newark 
in 1875. Among others the Newark Daily Advertiser, one of 
the oldest newspapers in the northern part of the State, referred 
to the new plan of the Prudential as follows : — 

A new feature in insurance has just been introduced in this city, 
known as the Prudential Friendly Society, directed and officered by gentle- 
men of the highest character. Its business location is in the State 
Bank building, and as it is the first move in this direction made in this 
country, its working should be, explained. 

The plan is that a certain weekly or monthly stipend paid to the 
Company shall secure a certain return in case of sickness, a provision for 
funeral expenses in case of death and in other cases a pension after a cer- 
tain age. This latter phase is not new, except as it is attainable by persons 
of small means who are "Prudential" enough to make and invest small 
savings at frequent intervals. The Prudential Friendly Society of Newark 
provides the applicant for membership with a blank on which are printed 
certain questions, which are answered and signed by the applicant and 
then referred to the Board of Directors. No medical examination is 
required, and the application is approved or rejected as the Board may 
decide. If accepted, something like a pass-book is issued to the new 
member, in which is printed the agreement between him and the Society, 
and in which the account between the two is written up at every payment. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 75 

In so far it does not differ much from many other forms of benefit or burial 
societies emplo} r ed by the -working classes of England. 

But the Prudential Friendly Societies go further and more wisely. 
They place no restriction on account of age, sex or occupation. All share 
alike from one year of age to the oldest limit of our race, except as to the 
rate charges, which vary with the age. By tables prepared from a very 
wide experience in England, and investigations scientifically conducted, 
the societies have ascertained the actual experience of two millions of lives 
in England, Wales and Scotland, as regards sickness, old age and death. 
These investigations show the experience on males and females separately, 
the effect of life in cities, towns and rural neighborhoods and of different 
trades and occupations, from the worker in the mine to the mechanic in 
the shop, the seamstress at her work, the clerk in the store and all the 
various avocations and professions. They also show the average amount of 
sickness of each particular year of life from infancy to old age. It is a fact 
brought out by these researches that the risk increases with the age of the 
member, that youth resists the assaults of disease and more easily throws 
it off, while older age succumbs more readily to either sickness or death. 
The practice of many benevolent societies has been directly the opposite 
of this, and so either the young person pays too much or the old too little. 
In fact it is the theory of some of them that the young should shelter the 
old. It may be very generous, but it is not business. 

These data reached, and they have been carefully reached by a long 
experience, the general average of the chance of having to pay for a sick- 
ness, an accident, a burial or a pension can be fixed, although the individual 
cases will occasionally confound the statistics and the member takes out 
vastly more than he puts in. For the sick relief no greater amount is 
granted than $25 per week, and for the burial fund $500 is the limit. When 
a loss accrues it is instantly payable. The terms of the agreement are so 
simple that questions of fraud are not likely to arise, and the presentation 
of the evidence is all that is needed to secure the payment. The whole 
subject is worthy of study. We have given only a meagre outline of its 
general features and are not altogether informed as to all its merits or 
demerits. But we know that it has succeeded in England, and our rank as 
a manufacturing town, the close likeness of our industrial classes to those 
of the best class of English mechanics, induces us to suppose that the plan 
may work a great beneficence. 

In a similar manner the Society received the endorsement 
of other leading newspapers of Newark, and, as an indication of 
the careful consideration given to the subject, I quote the following 
extract from the Newark Eve?ii?ig Courier of November 13, 1875 : — 

We have examined with considerable interest and satisfaction the 
prospectus of a new institution in our city called The Prudential Friendly 
Society, and which is located in the State Bank building, 812 Broad street. 
This Society has for its object to provide aid to its members whether male 



j6 HISTORY OF THE PRUDENTIAL. 

or female in event of sickness, old age and death. * * * * The contract 
between the Society and the member is very plain, and there seems very little 
chance for misunderstanding. It is ' ' so much benefit for so much money. ' ' 
One of the Joundation-stones of the system which the Prudential has intro- 
duced here is equity. Members are charged a contribution according to age, 
and the rates are so adjusted that each age contributes to the funds of the 
Society just in proportion as that age contributes to the risk. Experience 
has shown that at age twenty a person may be expected to be sick a little 
over eight-tenths of one week, while at sixty a person will upon the 
average be sick a little over four weeks in a year. Now it would be mani- 
festly unjust to charge two persons of the two different ages named, the 
same amount of contribution for an equal benefit, when one contributes 
five times as much to the risk of the Society as the other. The Prudential 
has kept this fact in view in making up rates, and has adopted the plan of 
charging contributions according to the age at the time a member enters 
the Society. In fact the whole plan of the Society rests upon a scientific 
basis, a basis which has been ascertained and approved by the highest 
actuarial ability in this country and England. 

In a city like Newark, whose population is largely made up of working 
men and women, the Prudential ought to find a large and successful field 
of operation. It seems to us that this organization is calculated to accom- 
plish a work of great beneficence wherever are to be found poor families in 
which the expense of sickness or death, or the infirmities of old age would 
cause discomfort or distress. It certainly will be a great boon if people of 
limited income can, by payments so small as not to cause inconvenience, 
provide a fund sufficient to pay the expense of a decent funeral, or which 
shall relieve the suffering and sorrow of the sick chamber. 



And as a further indication of the approval on the part of 
the press, I quote an extract from the Newark Register of 
November 13, 1875, in which the subject of Industrial insurance 
is also discussed at length from the standpoint of public policy : — ■ 

It is often said that there is nothing new under the sun ; but the plan 
of insurance put forth by the Prudential Friendly Society, an institution 
just organized in this city under the auspices of some of our very best and 
most responsible citizens, is certainly a novelty in this country. 

A feature of the Prudential system is the certificate issued guarantee- 
ing payment of a burial fund only, and may be obtained at all ages — from 
the child one year old to the old man or woman who has reached the ripe 
old age of seventy-five. 

Every pains seems to have been taken by the projectors of this institu- 
tion to adapt it to the requirements of people in moderate circumstances. 
Hence, in event of sickness or accident, the society pays losses promptly 
from week to week while sickness lasts, that the money may be had and 
used when it will be of the greatest value ; and in old age the pension will 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. JJ 

be paid upon a fixed day of each month with as much regularity and cer- 
tainty as a pension by the Government. 

When death occurs the burial fund will be paid immediately after the 
proper evidence of the loss is filed in the office of the society, and thus it 
becomes available for funeral expenses, at a time which to most people of 
slender income is one of the greatest extremity. 

The terms of payment required are also of the most advantageous 
kind. It would be worse than vain to offer poor people protection against 
the adversities of life and death, if the terms were such as to put it practi- 
cally beyond their reach. But what prudent, right-minded working man or 
woman can not and will not lay by a few cents each week or month to 
provide for his or her own future comfort, or the comfort of those whom it 
is a right and duty to protect? It is with great wisdom, it seems to us, 
that the Prudential has with so much care studied the necessities of the 
industrial classes. It makes the society in reality what it is designed to be, 
an institution for all. 

One of the most gratifying facts connected with this society is its 
strength and security. It is not too much to say that no institution in 
Newark — a city justly proud of its strong moneyed corporations — has a 
Board of Directors that can more strongly claim the confidence of our 
people. The gentlemen are unexceptionable as to ability, wealth and 
character. In this there is a guarantee that the affairs of the Prudential 
will be honestly and ably managed. 

The system upon which the society transacts its business has received 
a long, patient and thorough investigation. It is about three years since 
an examination into the experience of similar societies in England was 
first begun with a view to establishing a society here, and although this 
has been quietly carried on, the investigation has been the most searching 
and thorough. The statistics upon which the rates are based are derived 
from the experience of a large number of societies and extend over many 
years, and are made by some of the oldest actuaries in London. As a 
matter of still greater precaution these have been again examined and 
tested by the Actuary of the society, Professor John E. Clark, of the 
Sheffield Scientific School of Yale College. These rates are founded upon 
the well-established fact that the risk increases with the increase in age, 
and that it therefore costs less to insure a young person than it does an 
old one. Each particular age is charged according to the risk he or she 
brings into the society on joining it. 

The society may be said to be founded upon a rock. In a city like 
Newark, embracing so many working men and women, the Prudential 
ought to do a large business. In fact, we can not see how this class of 
people can afford to do without its protection. 

In these newspaper articles there is so clear a recognition of 
the value, importance and necessity of such an institution as the 
Prudential, that I can not but think that, but for a recognized 
and actually existing necessity, it would have been impossible for 



78 HISTORY OF THE PRUDENTIAL. 

the Society to have been ushered into existence by critics as 
friendly as they were honest, conservative and wise. 

While the new undertaking received so warm a welcome in 
the city of its birth, but little knowledge of the organization of 
the Society seems to have extended beyond the local boundary, 
and only fragmentary references occur in the insurance journals 
during the latter part of 1875. The Insurance Monitor in its 
November number referred to the Prudential, making at the 
same time reference to a similar attempt to organize an Industrial 
insurance company in Washington, D. C. As has previously 
been stated, The Industrial Life Insurance Company of Wash- 
ington never entered the stage of actual operations, and I confine 
my quotation to the reference made to the Prudential Friendly 
Society : — 

The Newark enterprise is known as the Prudential Friendly Society, 
modeled after the English associations of the same name, with an effort, so 
far as we have learned, to profit from the experience of the best among 
them — the Manchester Unity and the Foresters. Here again a word of 
caution may not be amiss. Until the subject was brought to the attention 
of Parliament some few years since, a large proportion of these organizations 
were, through ignorance or recklessness, sadly mismanaged, and numbers 
of them were in a bankrupt condition, while others were rapidly drifting 
into the same state. This condition of things was brought about by the 
same error which characterizes the co-operative schemes in this country — 
a total disregard of the influence of age on the cost of insurance. And we 
would remind those in charge of this young enterprise that whatever the 
form of organization or nature of the benefit, age, as an element of the risk, 
can not be disregarded without almost certain failure in the end. The 
early experience of a friendly society is peculiarly deceptive. Only the 
probing of a skilled actuary can discern the insidious elements of future 
evils existing under the deceptive strength of a friendly society for years 
before the final crash. 

The manufacturing importance of Newark, approaching so nearly the 
condition of English cities, gives a strong encouragement to those interested 
in the success of this new enterprise. 

I have been compelled, for want of space, to limit myself 
to meagre abstracts from the public press of the period, for the 
purpose of illustrating the distinct local demand for such an in- 
stitution as the Prudential, and the universal and intelligent local 
recognition of the value of Industrial insurance from the stand- 
point of public policy. Had space permitted, I could have added 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 79 

materially to this proof in support of the assertion that Industrial 
insurance in this country has been founded in consequence of a 
social demand, representing a social growth which has its founda- 
tion in the necessities of the people, and that in consequence the 
subsequent enormous development and extent of the business is to 
be traced in the needs of the people, which had been ill-supplied 
by a multitude of insurance schemes, all of which have since gone 
into bankruptcy or decay. 

So much space having been given to the factors leading up 
to the formation of the Society, I must needs deal very briefly 
with the actual experience and business history. I have already 
stated that the first actual business transaction occurred on 
November 10th, when a Mr. W. R. Drake, Cashier of the German 
Bank of Newark, applied for an insurance of $500, payable at 
death, and $10 per week, payable in case of sickness, the weekly- 
premium payments to cease at the age of sixty-five. Mr. Drake, 
it will be observed on reference to the list of directors, was also one 
of the members of that Board, and no doubt was influenced in 
taking the risk by this personal relation to the Society. The 
application was signed by Mr. Dryden himself, as a witness to 
the transaction which marks the actual beginning of Industrial 
insurance in America. It was only by slow degrees that the 
business became known to the public, nevertheless by December 1, 
1875, 62 applications had been received. During the month 242 
more applications were received, and during January, 1876, the 
number of new applications reached 558. During a little less 
than three months 862 persons had made application for Indus- 
trial insurance on the various plans offered to the public by the 
Society at this early period of its existence. During the last week 
of January, 1876, 206 applications were received, which must be 
looked upon as a very strong indication of the local demand for this 
class of insurance. As to the character of the business received, it 
is possible to answer some questions on this point by the statis- 
tics of the first one thousand applications, w r hich have been ab- 
stracted from the records of the Society. Of the first 1,000 appli- 
cations 25 have been lost or partly destroyed, 29 are duplicates, 
indicating double insurances, 329 are infantile risks or applica- 
tions for insurance on persons under ten years of age, while 617 
are adult applications, of which 328 were on males and 289 on 
females. The occupations of the 328 males are given in the 



8o 



HISTORY OF THE PRUDENTIAL. 



following table, with as much detail as the space at my command 
permits : — 

OCCUPATIONS OF MALES INSURED IN 
THE PRUDENTIAL FRIENDLY SOCIETY. i875-'76. 



Accountant, 2 

Agent, 3 

Bag-Factory Employee, .... 2 

Baker, 6 

Bank Employee, 4 

Barber, 9 

Bartender, 1 

Blacksmith, 6 

Bookkeeper, 5 

Brass Moulder, 3 

Butcher, 6 

Car Driver, 3 

Carpenter, 11 

Clerk, 29 

Coachman, 6 

Conductor, Horse-car, 3 

Driver, Teamster, 8 

Druggist, 2 

Editor, 2 

Engineer, 3 

Florist, 3 

Gardener, 2 

Grocer, 4 

Gunsmith, 1 

Hatter, 4 



Hostler, 4. 

Insurance, .2 

Janitor, 2 

Japanner, 4 

Jeweler, 5 

Justice of the Peace, 1 

Laborer, 5 

Lawyer, 3, 

Liquor Dealer. 1 

Machinist, 11 

Manufacturer, 5 

Merchant, 3 

Moulder, 3 

Musician, 3 

Painter, 3 

Physician, 1 

Plumber, 2 

Salesman, 5 

Shoemaker, 5 

Student, 30 

Surrogate 1 

Undertaker, 3 

Waiter, 4 

Miscellaneous Occupations, . . 94 



This table would seem to prove that the applicants for this 
class of insurance represented all the elements of the population, 
including men employed in well-paid occupations, as well as those 
who earned their living by day labor. The truly industrial 
character of this class of risks is clearly indicated by the data 
represented in the preceding tabulation. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 



81 



The age distribution of the 329 infantile applications is given 
in the following table, as an indication of the demand for this 
form of insurance at early ages : — 

PRUDENTIAL FRIENDLY SOCIETY. i875-'76. 
Infantile Applications. 

ages at entry. 



Age Last 
Birthday. 


Male. 


Female. 


Total. 


I 


3 


5 


8 


2 


24 


21 


45 


3 


29 


23 


52 


4 


15 


22 


37 


5 


21 


18 


39 


6 


17 


14 


3i 


7 


18 


19 


37 


8 


14 


18 


32 


9 


13 


IO 


23 


10 


12 


13 


25 




166 


163 


329 



This table would seem to prove that there was no selection 
against the Company in an excessive aggregation of risks at very 
young ages, but that the distribution of applicants by age periods 
was normal and fully in accordance with the general distribution 
of the population at the ages indicated. The reason for the 
non-acceptance of risks under one year is to be found in the fact 
that on account of the excessive mortality prevailing at ages 
under one the amounts which could be insured for under such 
policies would not be sufficient to attract custom enough to 
warrant the acceptance of this class of risks. 

In England it has always been the custom to insure children 
from birth, or from within a few weeks of the date of their birth, 
for small sums in return for a weekly premium of one penny. It 
is self-evident that the large increase in the business operations of 
Industrial companies must gradually diminish the number of 
uninsured persons, making it desirable to accept risks from birth 
upwards, but this point is not likely to be reached in this country 
for a number of years to come. 



82 



HISTORY OF THE PRUDENTIAL. 



The following table will show the age distribution of the 
617 adult applicants, with distinction of sex : — 



PRUDENTIAL FRIENDLY SOCIETY. i875~'76. 
Adui/t Applications- 



Age at Entry. 


Male. 


Female. 


TOTAJU 




IO-14 


38 


32 


70 




15-19 


43 


39 


82 




20-24 


52 


47 


99 




25-29 


50 


46 


96 




30-34 


47 


26 


73 




35-39 


19 


22 


4i 




40-44 


25 


21 


46 




45-49 


24 


19 


43 




50-54 


14 


14 


28 




55-59 


8 


10 


18 




60-64 


2 


8 


10 




65-69 


3 


4 


7 




70-74 


1 


1 


2 




Unstated, 


2 




2 




Totals, 


328 


289 


617 



On examination of this table it will be found that the age 
distribution was normal, showing no indication of adverse selec- 
tion of applicants at advanced ages, but rather an aggregation at 
the productive period of life, when men and women are actively- 
engaged in industrial occupations. The tables given confirm the 
preceding conclusion, that the demand for Industrial insurance 
came directly from the industrial population, and that this class 
of risks was fully represented in the body of the policy-holders of 
the Society from the beginning. 

Among other facts brought out by an examination of the 
early records of the Society, it appears that the method of pay- 
ment selected by the majority of the applicants was for insur- 
ance on the weekly- or bi-weekly-payment plan. Out of the 
1,000 applicants the information as to method of payment is avail- 
able in 946 cases, and of this number 484 selected the weekly- 
payment plan, 130 the bi-weekly-payment plan, 180 the monthly- 
payment plan, 29 elected to pay quarterly, 75 semi-annually, and 
16 preferred to pay their premiums once a year. For 34 cases the 



THE PRUDENTIAL FRIENDLY SOCIETY, 1875. 83 

information as to method of payment was not stated. Hence, it is 
clear that in the majority of cases the weekly-premium plan was 
given preference, for, even in cases where the premium pay- 
ments were made bi-weekly or monthly, it is to be assumed that 
this was the choice of the office, to avoid loss of time in making 
collections. The industrial character of the risks accepted is, 
therefore, further supported by the distinct preference given to 
premium payments on the weekly plan. 

Some further information of interest is supplied by the data 
pertaining to the amount of insurance applied for. While all of 
the infantile risks accepted were for burial purposes only, of the 
617 adult applicants for which the information is available, 356 
applied for insurance payable at death, 136 for burial insurance 
and additional benefits in case of sickness, 96 for sickness benefits 
only, 24 for sickness, annuity and death benefits, while for 5 the 
information is not available. It is, therefore, shown that distinct 
preference was given to insurance payable at death, and, while 
some preference was given to sickness insurance in combination 
with burial insurance, only a very small demand seems to have 
existed for sickness insurance alone, and the industrial character 
of the class of risks accepted by the Society is, therefore, further 
supported by the data showing the preference given by applicants 
to insurance for burial purposes only. 

An examination of the data pertaining to the amounts of 
insurance applied for indicates a tendency to insure for sums of 
from $100 to $150. Out of 521 applicants, 90 insured for sums 
under $100, 324 insured for sums between $100 and $200, 66 
insured for sums from $200 to $300, 21 for sums from $300 to 
$400, while only 15 insured for sums of $500, which at that time 
was the maximum amount which could be insured for in the 
Society. For five applicants the information was not stated. 
The foregoing data and statistics are clearly in favor of the con- 
clusion that the applicants for Industrial insurance represented 
the industrial population, or men and women employed in gainful 
occupations ; in other words, the superior class of working people 
of the city of Newark at that period. 



84 HISTORY OF THE PRUDENTIAL. 



CHAPTER VI. 

THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 

By the first of February, 1876, it could, therefore, with some 
truth be said that the experimental stage of the business had 
been passed, and that no further proof was needed to demonstrate 
the public demand for Industrial insurance in one of the most 
important manufacturing cities in the United States. It could 
even be said with some truth of Newark as an able writer had 
said of Industrial insurance in England, that ' ' A vast yet 
silent and unseen revolution is in operation among the work- 
ing classes. Life insurance until lately has been exclusive^ 
confined to the upper and middle classes of Englishmen. By 
means, however, of what is called the Industrial system of life 
insurance, adopted by certain offices, life insurance for small 
amounts is becoming so popular among workingmen that signs 
are not wanting that the life-insurance movement will permeate 
upwards and receive an impetus among the higher classes from its 
adoption by those at the other end of the scale. This great and 
beneficial work is mainly carried on by agents in London and the 
manufacturing districts, who go about among the workingmen and 
persuade them to effect insurance, and then call upon them every 
week for the premiums. ' ' * 

While a large portion of the business obtained by the first of 
February had, of course, been secured as the result of direct per- 
sonal solicitation by the agents of the Society, proof is not wanting 
that the working people, on their own account, had applied at the 
office of the Society for information as to the new plan of insur- 
ance, to which reference had been made in the daily newspapers 
of the period. In fact, during December, 1875, it had already 
become necessary to keep the office of the Society open evenings, 



* The Life Assurance Handbook, by George Clifford, p. 53 et seq* 
London, 1876. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 85 

to furnish information and accept proposals from voluntary appli- 
cants. The Newark Register for this month contained a notice 
to the effect that ' ' The Prudential Friendly Society in the State 
Bank Building has found it necessary to keep its office open even- 
ings until half -past seven o'clock, to transact business with and 
answer the inquiries of those who are unable to get to the office in 
the day-time. ' ' Thus, at the very beginning the popular approval 
and interest in the new plan of family insurance became manifest 
to an extent hardly anticipated by those in charge of the new 
enterprise. 

The friendly interest of the Newark newspaper press con- 
tinued, and from a long article on the subject of Industrial in- 
surance in the Sunday Call (Dec. 12, 1875), at that time, as it is 
to-day, the most important and respected Sunday family news- 
paper issued in the State of New Jersey, I abstract a few 
remarks of more than passing importance : — 

In its population of one hundred and thirty thousand souls, Newark has 
at least fifty thousand who belong to the industrial class. The skill and 
industry and prudence of these people have raised our city to its present 
eminence, and given to it its name and fame. Whatever affects their 
interests is vital to its well-being. The Call has been in the past, and will 
continue to be in the future, the champion of this important portion of our 
people, and it will ever be found to speak out plainly for or against any 
enterprise seeking their patronage, according as it shall merit censure or 
approval. 

Following out this line of policy, we have closely scrutinized the 
Prudential Friendly Society, an institution recently organized in this city 
for the benefit of working men and women, or, more correctly speaking, 
for the benefit of working people of both sexes and all ages — for the Society 
accepts members from one year old up to seventy -five. And at the outset we 
wish to say that the Prudential is thoroughly well organized, and is founded 
on a firm basis, managed by a Board of Directors composed of some of our 
most substantial and honorable citizens, and controlled by gentiemen of 
great intelligence, energy and ability. 

After a lengthy explanation of the objects and methods of 
the Society, the Call continued : — 

In the payment required the Society has also carefully consulted the 
requirements of people of limited means. Any benefit granted by the 
Prudential may be paid for in weekly, monthly, quarterly, half-yearly or 
yearly contributions. There is not a mechanic or factory girl in Newark 
who can not spare a few cents a week to secure a benefit when sick and a 
decent burial at death. There is not a prudent, industrious father who 



86 HISTORY OF THE PRUDENTIAL. 

can not, without inconvenience ', pay a few cents to insure a respectable burial 
for his children. 

At the time we were at the office of the Society, which, by the way, is 
the State Bank building, 812 Broad Street, the Society was not prepared to 
issue certificates of membership, yet many applications had come in unso- 
licited, and were filed to be acted upon as soon as the Society was ready for 
business. Among others that were shown us we noticed applications from 
one whole family of eight persons — from the father, forty-six years old, 
down to the youngest child, three years old. All these benefits cost the 
father but a small amount each week, a sum that he could easily pay and 
not miss from his earnings, while he has the satisfaction of knowing that 
in the event of misfortune he and those he loves are provided for. 

The whole scheme of the Prudential seems so completely to meet a need 
in Newark that we are confident the benefits of the Society will be eagerly 
sought. It is an institution established for people of small income. It is 
modeled upon societies in Europe which have existed for many years, and 
have met with 'great success. We believe the working people of this 
country are unsurpassed by any people of the world for prudence, thrift 
and industry, and we also believe that the Prudential, which is the pioneer 
Friendly Society of America, will be received with the favor which its 
merits deserve. 

This unqualified endorsement of the plan of the Prudential 
was of special value to the Society, since the Sunday Call was 
then, as it is at the present time, strictly a family newspaper, and 
one of far-reaching influence among the industrial population of 
the city and vicinity ; and it was of no small importance to have 
the Call endorse the new plan of family insurance in words 
which were indicative not only of a clear comprehension of the 
system of Industrial insurance, but also, at the same time, of the 
needs and wants of the industrial population of the city. 

While in its early stage some business, or even a considerable 
"proportion of business, might have been obtained by voluntary 
applications, it was early evident that it was necessary to employ 
agents, or solicitors, for the purpose of making the merits of the 
plan more generally known, as well as for the purpose of collect- 
ing the weekly premiums, which were gradually assuming con- 
siderable proportions. Accordingly, the Society advertised for 
canvassers, and I abstract the following from one of the Newark 
newspapers, dated December 18, 1875 : — 

WANTED ! 

Canvassers for the Prudential Friendly Society. This first effort in 
this country to establish a Friendly Society worthy of the patronage of all 



THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 87 

classes, is meeting with a generous response. People in these hard times 

are more than usually thoughtful in making provision for sickness, accident, 

old age, and a burial fund, beyond the reach of the exigencies of business. 

Intelligent ladies and gentlemen can secure good districts by applying to 

the principal office. 

812 Broad Street, State Bank Building. 



The significant fact in this advertisement is that female, as 
well as male, agents were to be employed as solicitors and 
collectors, and, while this may not have been the first instance of 
the employment of women in the life-insurance business, it 
certainly was one of the earliest experiments in this direction ; 
and while the practice, in later years, was discontinued, there 
are still at the present time, women agents employed in the 
Industrial Department of the Prudential Insurance Company. 

Every step which had been taken by Mr. Dryden and his 
associates in the early management of the Society had been most 
carefully considered to insure, if possible, complete success from 
the beginning, not only in matters of general importance, but 
also in minor details, likely to demand consideration at some 
future day, when the Society should have reached considerable 
proportions. How thoroughly in earnest Mr. Dryden must have 
been, and how anxious to do justice to both the Society and its 
members, is in no case better illustrated than in his early corre- 
spondence with Mr. Clark, who had now been officially appointed 
consulting actuary of the Society. 

In perfecting the Industrial insurance contract, Mr. Dryden 
considered fully and seriously the question of surrender privilege 
of some kind or another in cases where policies had lapsed for 
non-payment of premiums within the limit of grace granted by 
the Society in cases of default. Mr. Dryden seems to have stated 
his views in detail to Mr. Clark, who, under date of November 
22, 1875, replied as follows : — 

Your favor of the 19th instant, asking my opinion as to the advisability 
of making some provision in your Annuity contracts by which members may 
receive some portion of their contributions in case they discontinued their 
payments after having made them some time, is before me, and I answer 
it as soon as practicable, after having given it due consideration. I should 
advise you by all means to deal equitably with such cases as they arise, but 
/ hardly think it advisable to make any stipulation upon the subject in your 
contract. If you were to do so, in the case of the Annuity contract, to be 



88 HISTORY OF THE PRUDENTIAL. 

consistent you would also have to do so in the case of the sickness and 
burial-fund contract, and to make upon any rational basis perfectly definite 
stipulations that your members could readily understand in all these cases 
would involve you, before entering upon business, in no little additional 
calculation. * * * * It is, in my judgment, better to derive the data 
for such calculation [of surrender value] from your own experience, than 
either from the best assumptions or the experience of other societies, 
which may have been quite different from what yours will be. I am aware, 
of course, that there is a growing opinion in favor of such stipulation [of 
surrender value] which is not without its foundation, and in procuring 
business it might be some advantage to have them, but, upon the whole, / 
should avoid them for the present. For the discussion will no doubt throw 
more light upon the subject and bring about more unanimity of opinion, 
as to how such stipulation ought to be fixed, as well as more unanimity of 
practice in the allowance they contemplate where they are not inserted in 
the contract, and you can take a step forward in this direction at any time, 
but it will not be easy to take a step back. 



This letter is of more than passing importance, in view of 
latter-day developments and improvements in the Industrial 
insurance contract. It furnishes historic proof of an earnest 
effort on the part of the founder of the Prudential to grant, from 
the start, a cash or other surrender value to policy-holders com- 
pelled to lapse their contracts. It is a clear demonstration of 
the spirit of fairness and equity which has characterized all 
the business transactions of the Prudential with its millions of 
policy-holders, and to which is largely due the immense popu- 
larity of the system from Maine to Colorado. It is made clear 
by this letter, containing as it does the best available actuarial 
testimony of the time, that if cash-surrender privileges or paid- 
up policies were not granted during the early years of the 
Company's growth, it was because actuarial experience was 
against such a practice ; and while in later years the Industrial 
companies, and especially the Prudential, made many valuable 
and far-reaching concessions on this point, it was because they 
acted once more upon the best actuarial advice, and waited until, 
in the light of their own experience, the way was clear for grant- 
ing privileges which, once conceded, could not, without perma- 
nent injury, be easily withdrawn. 

Thus it is shown that due consideration was devoted to the 
question of surrender values at the very beginning of the business 
in this country, and it is equally clear from subsequent results 



THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 89 

that, of however much theoretical value such concessions might 
be, practically it was a point of small importance at the time, 
since cases of hardship resulting from the lapsing of policies 
could not arise until such policies had been in force a considerable 
period of time, while to those who really wished to remain mem- 
bers of the Society it was easy to revive lapsed policies by the 
payment of such arrears as might have accumulated. This, it is 
plain, was the view of the public, which in ever-increasing 
numbers became patrons first of the Prudential, and, after 1879, of 
other Industrial insurance companies which followed it, although 
no cash surrender or paid-up provisions formed part of the Indus- 
trial contract until after the business had been some sixteen years in 
successful existence, and some 5,000,000 Industrial policy-holders 
had been secured. 

Hardly had the Prudential Friendly Society commenced to 
issue its certificates and secured the local reputation and respect 
of which I have spoken at some length, when, as it was perfectly 
natural to expect, efforts were made by unscrupulous individuals 
to float similar enterprises, apparently identical in scope and 
method with the Prudential, but, as a matter of fact, similar in 
objects and aims with a former type of fraudulent co-operative 
societies. Had these efforts been honest and straightforward 
nothing could be said against them, but, being without exception 
base and plainly fraudulent imitations of the Prudential plan 
of Industrial insurance, they, for a time at least, caused no 
small degree of anxiety and concern to Mr. Dryden and his 
associates. 

One of the first of these imitations of which I have record, 
and probably the very first, was the Prudential League of 
Harrisburg, Pa., an organization chartered under the laws of 
Pennsylvania, with the Governor of the State as president. The 
policies issued by this society were, it would seem, guaranteed by 
a regular life-insurance company, somewhat along the lines of 
the former * ' Bunds " or ' ' Unions, ' ' to which reference has been 
made. There was, in this effort, a clear intent to trade on the 
name of the Prudential, but, as was natural, the society, after a 
brief struggle, by reason of its inherent weakness, was forced out 
of existence. 

It is quite probable that the men who managed the concern 
were the same who, during the latter part of the year, founded 



90 HISTORY OF THE PRUDENTIAL. 

the Prudential Mutual Aid, also of Harrisburg, Pa. , which had a 
career extending over several years, but which also finally ended in 
receivership, causing a not inconsiderable loss to the unfortunate 
membership. The society was based on the principles of co-oper- 
ative insurance, and was nothing more than an attempt to defraud 
the public by trading on the name and principle of the Prudential, 
which by this time had been recognized as a success in the new 
domain of life insurance for the industrial population. Such 
attempts at imitation were menacing to the Prudential Society 
only in that the public was likely to confuse the fraudulent 
practices of the former with the honest and straightforward 
efforts of the latter. 

Continued public interest in the development of the Pru- 
dential is evident from the numerous inquiries made as to the 
nature of the new system of life insurance, which, I may add, 
met only with encouragement on the part of those who had the 
management of the Society in their charge ; and perhaps no 
better illustration of this growth of a spirit of inquiry can be 
furnished than the following open letter, addressed to the Newark 
Daily Advertiser of January 17, 1876, which throws a most inter- 
esting side-light on the progress of the life-insurance idea among 
the wage-earners of the city of Newark : — 

Editor Advertiser : The industrial classes of Newark are a much 
more important factor in the prosperity of the city than is usually consid- 
ered, and perhaps more so than any other, with the possible exception of 
capital. This class is usually thoughtful and often provident, and therefore 
to the number of thousands have become associated in various societies for 
mutual aid and protection in the hour of need. No man will attempt to 
deny the value of association for this purpose. But the philosopher, 
political economist or whatever name is his will see the importance of 
association upon a proper basis. 

What is the basis upon which these various mutual societies are con- 
ducted ? Is there any mathematical or scientific basis to any of them ? So 
far as we know, there is nothing beyond that which experience gives. 
This is worth something, but is it a sufficient guarantee for the future ? 
Would the Life Insurance Companies be considered safe if their work was 
carried on by the light of experience only ? No, but the law steps in and 
requires them to lay aside for every risk a reserve large enough to meet that 
risk at maturity, at old age and death, and no such company is safe, even if 
it has a large amount of cash in hand, unless it has a reserve sufficient to 
meet this liability upon a thoroughly mathematical basis. 

Here, then, is a great question which concerns 10,000 and perhaps 
50,000 of our industrious and clear-headed mechanics. 



THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 91 

Who will take up this subject and not leave it until -we know where 
they stand ? 

Perhaps the Board of Trade is in the position to do it. Certainly, the 
subject is of the greatest importance to Newark, and it is therefore worthy 
of their attention. 

Let them invite discussion by able minds, and if the basis is insecure 
let them memorialize the Legislature that such general laws may be enacted 
as will oblige all such societies to provide the proper reserve or show what 
is their fund and what their risk, so that people may know what they are 
doing before they pay their money. 

The Board of Trade can do no nobler work than throw their arms 
around these people and protect them with their influence, their intelli- 
gence and procurement of proper laws. 

(Signed) Protection. 

It was not until April 29, 1876, that the Advertiser made 
further reference to the proposed investigation of the system of 
Industrial insurance by the Board of Trade, and I can do no 
better than quote the article in full, as a further contribution to 
our knowledge of the development, at this period, of the Indus- 
trial insurance idea in the city of Newark among all classes of 
the population : — 

It is suggested to the Board of Trade that it invite information upon 
the system of industrial insurance that has recently been introduced by the 
Prudential Friendly Society. This is a matter that would legitimately 
come before such a body, and one which, as large employers, the members 
are directly interested in. This system aims to improve the condition of 
the class of people upon whom these gentlemen depend for skill and 
industry in the various departments of business activity. // makes them 
Provident and self-reliant. It encourages thrift and good morals, and 
assists in producing useful mechanics and law-abiding citizens. Our large 
employers well understand that money can not be better expended even as 
a matter of economy — we say nothing from the humanitarian standpoint — 
than when used in elevating the condition of their help. But when the 
hands can themselves be induced to take a wise thought and provide for 
the future, it greatly lifts them up. This is the beneficence of this system 
of industrial insurance. Some of our largest employers deem this matter 
so important that they establish associations among their employees and 
require each person to contribute weekly to the fund. But the limited 
number of hands employed by most establishments makes this impracti- 
cable with them, and therefore the great mass of the industrial class must 
look for protection to some public institution that carries on the business. 

Now, it is important to employer as well as employed that trust should 
be placed in a really solvent, reliable institution. Herein the gentlemen 
who compose the Board of Trade can greatly aid the people by becoming 
themselves well informed and imparting information to their employees. 



92 HISTORY OF THE PRUDENTIAL. 

Will the Board invite some competent gentleman to address them upon 
the subject of industrial insurance? The success of the Prudential clearly 
indicates the importance of the matter. This Society, recently organized, 
in the midst of hard times, with a system untried in this country, sought 
patronage almost entirely among people of limited means, and confined its 
operations to the city of Newark, yet it has already received over 4,000 
members. Doubtless the character of its officers and directors has done 
much to inspire confidence and popularize the institution. But back of 
this lies the fact that the industrial classes appreciated and eagerly 
embraced its provisions. They needed the Society. We may accept this 
as evidence that this is only the germ of a system which is to grow up and 
exercise a great influence upon the social condition of the workingman of 
America. It has already done so in England, where 8,000,000 people now 
are interested in this class of provident associations. It is probable that 
there will, in a few years, be as great a number interested in similar institu- 
tions in America. It is important in the infancy of the business, and 
before mistakes are made that can not be corrected, that there shall be had 
a full knowledge of those laws that regulate the risks attached to sickness 
and burial insurance. The Odd Fellows, Knights of Pythias, and all 
kindred associations are deeply interested in the matter. A proper knowl- 
edge as to whether their rates of contributions are sufficient to enable them 
to pay in the future the benefits they promise, is of vital importance to 
them, and a movement such as we have suggested on the part of the Board 
of Trade would start an inquiry that would result beneficially. 

One of the most suggestive remarks in this quotation is the 
sentence that ' ' We may accept this as evidence that this is only 
the germ of a system which is to grow up and exercise a great in- 
fluence upon the social condition of the workingman of America. ' ' 
These were truly prophetic utterances at a time when hardly the 
foundation had been securely laid of the first Industrial insurance 
company in this country, — a company which at the present time 
has a large portion of the population of Newark insured on its 
plans of Industrial, Intermediate or Ordinary life insurance ; a 
company which at the present time has more than 3,500,000 
Industrial policies in force on its books on the lives of American 
working people, and has indeed grown into an institution of 
great influence upon the social condition of the workingmen of 
America. 

The early success of the Society had been little short of 
marvellous, and by May 22, 1876, the five-thousandth application 
for Industrial insurance had been received. The difficulties 
which had been experienced had not been sufficient to hinder 
materially the rapid growth of the Society in various directions, 



THE PRUDENTIAL FRIENDLY SOCIETY, 1876-1877. 93 

but, as has previously been pointed out, the fraudulent imita- 
tions of concerns operating under similar names and following 
similar plans were likely, in course of time, to prove a serious 
menace to the good name and standing of The Prudential. The 
difficulties experienced in obtaining the services of good and reli- 
able agents had often made it necessary to discharge inefficient 
employees, who would make use of their limited experience to 
establish societies or associations under names similar to the 
Prudential. Thus, about April, 1876, The Prudential Benefit 
Society had been organized in Newark by two men discharged 
from the service of The Prudential Friendly Society. The 
Newark Sunday Call, under date of April 2, 1876, found it 
necessary to call public attention to the danger of confusing a 
solvent society with insolvent imitations. 

However, in spite of such discouragements and disadvan- 
tages, the Society continued to make progress, and by December 
31, 1876, there were 4,816 policies in force, for an aggregate 
amount of insurance protection of $443,072. The total premium 
income during this year had been $14,495, of which $1,956 had 
been paid for claims. The total expenses for the year had 
reached $16,253, or $1 ,758 more than the income. The deficiency, 
together with the necessary amount to be held as reserve, had, of 
course, been paid in by the stockholders ; and thus, after almost 
fifteen months of actual experience in business operations, the 
Society was far from being in a prosperous condition financially, 
although, in the nature of the business, nothing else could have 
been expected for a number of years, or until the business should 
have become self-sustaining. 



94 HISTORY OF THE PRUDENTIAL. 



CHAPTER VII. 

THE PRUDENTIAL INSURANCE COMPANY 
OF AMERICA, 1877-1879. 

Thus far the business of the Society had practically been lim- 
ited to the city of Newark, but by November, 1876, it was 
decided to extend business operations to other cities of the State. 
Before this important step was taken it had been arranged for 
Mr. Dryden to visit England for the purpose of making a personal 
study of the methods and results of the British Prudential and the 
large Friendly Societies operating in the various parts of the 
kingdom, and with this object in view he sailed for Liverpool on 
November 28th, fully supplied with letters of introduction, not 
only to the managers of the leading societies and companies, but 
also to the leading actuaries and government officials connected 
with the administration of the various insurance institutions and 
Friendly Societies. This local investigation of conditions affecting 
Industrial insurance in England had become more and more im- 
perative as the business of the Society had increased, and experi- 
ence was gained which permitted of a careful study of the proba- 
ble normal rate of mortality and sickness among insured lives in 
this country. Hence the importance of a personal investigation, 
on the part of Mr. Dryden, of the actual conditions affecting 
Industrial insurance in England, and the necessity of a personal 
study of the causes and reasons that induced the Prudential, the 
Royal Liver and other societies to abandon the sickness branch of 
their business after a short experience, which, it is clear, must 
needs have been unfavorable. Without entering extensively into 
the question as to why the American Prudential finally followed 
in the steps of the English companies in abandoning its sickness 
branch, it may briefly be stated that partly on account of the 
small demand for such insurance in this country, partly on 



THE PRUDENTIAL INS. CO. OF AMERICA, 1877- 79. 95 

account of the inherent difficulty of transacting this form of 
insurance on a profitable basis, the Society, after having given 
this branch of the business a fair trial, finding it impossible to 
transact the same profitably or safely, followed other companies 
in limiting its business to whole-life policies on the level-premium 
plan. 

It may not be out of place to add the words of Mr. (now Sir) 
Henry Harben in explaining to the Royal Commission on 
Friendly Societies the reasons as to why his company had 
discontinued transacting a sickness insurance business. Mr. 
Harben stated that, as a matter of fact, his company found 
that "it did not pay," and, further, that "We found that we 
were totally unable to cope with the fraud which was prac- 
ticed," and hence Mr. Harben' s conclusion that "We have 
tried it, and I think our agents are the most honest, and we 
can not manage it. ' ' * 

During his stay in England Mr. Dryden gained much 
additional information, and became so thoroughly informed as to 
the most minute details of the vast business of the British Pru- 
dential that on his return he not only materially changed the 
practical working basis of the Society, but at once took steps to 
have the same reorganized on a purely commercial basis as the 
Prudential Insurance Company of America, which change in 
name took place by an amendment to the charter of The Pru- 
dential Friendly Society, which passed the New Jersey Legisla- 
ture during the session of 1877, and became a law on March 15th 
of that year.f 

Thus far, as has been stated, the business operations of the 
Prudential had been almost entirely confined to the city of 
Newark, but after Mr. Dryden' s return from England steps were 
immediately taken to open offices in other cities of the State. 
This was not only in accordance with the laudable ambition to 
increase the business of the company, but was also due in no 
small degree to a yielding to pressure brought to bear on the 



* Third Report of the Royal Commission on Friendly Societies, 
1873. P. 73- 

f I^ife Insurance Charters, p. 154. The Spectator Company, New York, 
1895. 



96 HISTORY OF THE PRUDENTIAL. 

managers of the Company by leading citizens of surrounding 
towns, who by this time had fully realized the value of Industrial 
insurance from the standpoint of the taxpayer and public-spirited 
citizens interested in the betterment of the economic and social 
condition of the industrial masses. 

Next to Newark, the most important manufacturing city in 
the State in 1877 was Paterson, which in that year had an esti- 
mated population of about 43,000, and which, according to the 
Census of 1880, was one of the most important manufacturing 
centres in the United States. During the early part of April, 
leading citizens of Paterson, including Mr. Garret A. Hobart, 
the late Vice-President of the United States, addressed a letter to 
the President of the Prudential, requesting a public explanation 
of the essential principles of Industrial insurance.* The following 
is a copy of the letter received by the Company : — 

Paterson, April 6, 1877. 
Allen L. Bassett, Esq., 

President of the Prudential Insurance Company of America, Newark, N. J. 

Dear Sir : Understanding that your Company is about to open an 
office here for the transaction of its business with the citizens of Paterson, 
we the undersigned beg leave to request that you will address a public 
meeting of citizens interested in this new system of Insurance, in some 
public Hall, and at such time as may suit your convenience, and explain its 
peculiar features. 

Yours Respectfully, 

John J. Brown, 
John Swinburne, 
Benjamin Buckley, 
George Wurts, 
Thos. N. Dale, 
Socrates Tutti,e, 
Garret A. Hobart. 



* Such lectures and public meetings on the subject of Industrial insur- 
ance were quite common during the early days of the business, and much 
good was accomplished by placing the merits of the "new departure" 
plainly and emphatically before the people. 



THE 



IfrnWial 



INSURANCE COMPANY 



OS* AMERICA. 



HOME OFFICE, 

KE'WABS, 1TSV JEBSST. 

Where aT communicabons respecting tbte 
Policy iboulJ be addrased. 



fo. 




CHARTER 

S 3 S3 :E3 Z=> S3 "3? -O" A la . 



iinoin all itten tig these presents, That The Prudential Insurance Company op America, in codslc 
eration of the representations and agreements made to and with them, in the application for this Policy, respecting 
the health, habits and condition of the person named and described in the first column of the schedule embodied 
herein, and also respecting any matter npon which this contract is based, and in further consideration of the sum of 
money, stated in the second column of said schedule, to them in hand paid, and of a like sum to be paid to said 
Company, or their authorized Agent, on or before each and every Jlonday subsequent to the date hereof, during the 
lifetime of said person, doth hereby promise and agree that, upon satisfactory proof of the decease of said person, 
they will pay, or cause to be paid (subject to the articles, conditions and agreements endorsed hereon), unto his or 
aer executors or administrators, the sum of money stated in the third column of said schedule. 

\$ r fD ClJ alUJaDS, that the production by or on behalf of this Company, its successors or assigns, of a receipt, of the description 
Sereinafter mentioned, for the sum of money insured hereby, or of other sufficient proof of payment by said Company of said sum of r:one7 
to any or either of the persons hereinafter mentioned .and described, and hereby authorized and empowered to sign said receipt for tnli 
receive the said gum of money, said receipt being signed by any person being either an executor or an administrator, husband or wife or 
relative by blood or connection by marriage of the person designated in the first column of the schedule embodied herein, shall be final end 
sonclusive evidence to all Intents and purposes that such sum has been duly pait' unto and received cy .ae 'person or persons lawfully sad 
rightfully entitled to receive the same, and that all nlaims and demands whatsoever, upon or against uiis Company tn isspect to ttrls PoLi'.y, 
aave been fully satisfied. 

^CODiuCil, ijOUKOET, that this Policy is issued and accepted subject to the restrictions, conditions and agreements aiwo> 
annexed, which it is agreed form part of this contract, and "upon the express stipulation that this contract shall become absolutely vcW, 
ind all premiums paid thereon forfeited to said Company, if the considerations for which the same is granted are not tree, or shall not &*, 
in ail respects, performed and observed ; or if the said person shall, without the .written consent of said Company endorsed, hereon, g* 
beyond the settled limits of the United States, or the British Provinces, iri North America; or if the said person shall die by the hands of 
justice or by suicide, whether sane>or insane, or in consequence of the use of intoxicating drinks, opiates or narcotics ; or of being engaged 
In any unlawful act ; or if the said person shall have previously obtained, from said Company, a Policy which shall, at the decease of said 
person, be in force, insuring a sum of money in consequence of his or her decease, unless the Policy first issued contains express permission 
that this Policy may also be in force at the same time. 




FIRST COLUMN. 

DAUB AND DESCRIPTION OP THE I 



SECOND 

column. 

WEEKLY PREM. 



THIRD COLOIN 



tit <Lii3 ttlUSS JgEIjlTCOf, the President and Secretary of said Company have signed these presents, and attached the Policy 
Stamp of the Company, at the City of Newark, New Jersey, this 




Secretary, 



: ^^^Y^^l 



FIRST INDUSTRIAL POLICY FORM USED BY 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 




> 

a 

O 

r 
i— t 

o 



3 



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2 
o 

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Sr 



25 



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CONDITIONS AND AGREEMENTS HEREIN BEFORE REFERRED TO. 



X. The statements and declarations made In the applica- 
tion for this Policy are in all respects full and true, 
and the said application" is hereby referred to, and 
made a part of this contract. 

& The person insured under this Policy shall not, with- 
out the written consent of the Company, enter into 
any military or naval service (except the militia, 
when not in actual service), or engage in the manu- 
facture of gunpowder, fire-works, or other explosive 
substances, or submarine operations. 

r. It the person insured under this Policy shall die 
within six months from the date hereof, the Com- 
pany shall be liable to pay one-fourth only of the 
amount specified in this policy. If the said person 
■hall die after six months, and within one year from 
the date hereof, the Company shall be liable for 
one-half only of the amount specified in the policy. 
If the said person shall die after one year from the 
uate hereof, the whole amount specified in this 
Policy shall be payable. 

<■ If any erasure or alteration snail be made in this 
Policy, except by endorsement made and signed 
by an officer of the Company, the Policy shall be void. 

« If any attempt shall be made by any person or per- 
sons interested in this Policy to obtain money from 
the Company, under this Policy, upon any false or 
fraudulent claim or representation, then the said 
Company shall have the right to cancel this Policy, 
without notice to such person or persons; and the 
said person or persons shall thereupon forfeit aO 
rights and privileges In the Company. 

fl. This Policy, and the Receipt Book in whl<a are 
ordered the premiums paid on the same, shall, at 
all times, on application of any authorized officer 
or servant of the Company, be produced and ex 
hfblfed to hiip ! and -noon anv Davmant bv the 



Company, under this Policy, they shall have the 
right to demand and retain possession of said Policy 
and Receipt Book, 

7. If, for any cause, this Insurance shall terminate, all 

premiums paid on account thereof shall be forfeitea 
to the Company, and all liability on the part of the 
Company under this policy shall cease; and incase 
for any reason the Company shall not attend to the 
collection of premiums payable on this policy 
through its agent or collector, it shall be the duty 
of the policy-holder (within the time allowed by the 
Company) to bring or send said premiums to tie 
home office or to the Company's agent, and in ■ event 
of the failure of the policy-holder to perform this 
duty, the Company may cancel this policy without 
notice to any person or persons interested therein, 
any statute to the contrary notwithstanding. 

8. No suit or action at law or in equity shall be main- 

tainable to enforce the performance of this contract 
until fifteen days shall have expired after the f i ling 
in the principal office of the Company of the above- 
mentioned proof, nor unless such suit or action shall 
be commenced within six months next after the 
deeease of the person insured under this policy; 
and it is expressly agreed that should any such suit or 
action be commenced after .the expiration of said sis 
months, the lapso of time shall be deemed as conclu- 
sive evidence against the validity of such claim, any 
6tatute of limitations to the contrary notwithstanding. 

0. No payments of premium made on this policy while 
it is in force will be recognized by the Company 
as valid or binding unless "made to a duly authorized, 
agent, and by such agent entered at the time of 
payment in the Premium Receipt "Book belonging 
with this Policy. 

10. Agents are not authorized to make, alter, or dis- 
charge contracts; or waive forfeitures; or receive 
premiums on policies in arrears beyond the time 
allowed by the regulations of the Company. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1877- 79. 97 

To this letter Mr. Bassett, in behalf of the Company, replied 
as follows : — 

Newark, N. J., April 7, 1877. 

Messrs. John J. Brown, Benjamin Buckley and others. 

Gentlemen : It will afford me pleasure to accept your kind invitation, 
and I will name Thursday Evening, 12th inst., at a % before 8 o'clock, 
at Odd Fellows' Hall, Main Street, as the time and place. During the last 
year of unparalleled " hard times " we issued 9,000 Policies to the citizens 
of Newark alone, and I can not see why the great beneficence which 
accrued to our people by reason of its liberal provisions, should not be 
furnished to the people of your City. This is a great step towards the 
people, providing as it does, some insurance to the poorest or the richest, 
male and female, and from 1 to 76 years of age, for a payment of 3 cents a 
week and upwards. I believe it worthy of the attention of all your people. 

Very Respectfully, your Obedient Servant, 

Allen L. Bassett, 
President Prudential Insurance Company. 

The above letter proves clearly the public interest in the 
new form of life insurance, and, by implication, the local need of 
some such form of a voluntary method of enabling the factory- 
workers and others to make secure provision for funeral expenses 
and the cost of medical attendance in a manner suitable to their 
social and economic conditions. 

Among other leading newspapers of Paterson, the Pater son 
Guardian, one of the oldest newspapers in New Jersey, gave 
emphatic endorsement to the plan of the Prudential, referring to 
it as ' ' practical insurance, ' ' adding that "we do not see why it 
should not be placed within the reach of everybody. ' ' Inciden- 
tally, mention was made of the fact that the Company had already 
extended its operations to Jersey City, Elizabeth and Hoboken, 
while the average issue of new policies had then reached 250 
policies a week. 

That there was a similar demand for Industrial insurance in 
Pennsylvania is proven by frequent references to the subject in the 
Insurance World, published at Pittsburg, Pa., agitating for the 
opening of Industrial offices in that State. 

In Jersey City, where an office had been established during 
the early part of 1877, the leading newspaper, the Jersey City 
Journal, in its issue of June 23, 1877, referred to the Prudential 



98 HISTORY OF THE PRUDENTIAL. 

as follows : " The secret of this success is, we take it, not only 
the tact and energy with which the enterprise has been managed, 
not even the eminent respectability of its Board of Directors, 
though these have contributed much to it, but it is mainly in the 
fact that this feature of insurance supplies a need which the 
industrial classes have felt. They now have the opportunity of 
making a small provision for their families, on easy terms. We 
doubt not the opportunity will be gladly embraced here, as it has 
been elsewhere, and that it will result in a positive advantage to 
our people. ' ' 

Thus during its early career the Company was welcomed 
wherever it opened its offices, as a useful factor in a much- to-be- 
desired amelioration of the condition of the industrial population ; 
while at the same time eminent citizens, as well as the public 
press, recognized clearly the fact that Industrial insurance was 
most likely to meet a want on the part of the masses, which thus 
far had not been met by any other of the large number of so- 
called insurance institutions. 

While some satisfactory progress had been made, outside 
factors did much to hinder the -financial and general progress of 
the Company. Aside from the general distrust of the public in 
all matters of life insurance, in consequence of the many failures 
of companies in other States, there also occurred this year the 
failure of a company having its home office in the city of Newark, 
which proved a most serious matter to all the other insurance 
companies transacting business in the State of New Jersey. 

The New Jersey Mutual I^ife Insurance Company had been 
organized in 1865, and during its early years had been in the 
hands of some of the leading citizens of the State. For reasons 
which can not be discussed here, the company had, in 1872, come 
under the control of outside parties, who at once began opera- 
tions which soon involved the concern in financial difficulties, and 
finally brought about the bankruptcy of the company. As late 
as August, 1874, the company had been examined by Blizur 
Wright, who reported, as the result of his examination, that he 
1 ' found no reason why its policy-holders should be dissatisfied or 
distrustful. ' ' * But proof was soon forthcoming which made it 
clear that the company, at the time of its examination, was not 



* New Jersey Life Insurance Report for 1877. 



THE PRUDENTIAL INS. CO. OF AMERICA, l877~'79. 99 

in a sound condition, and that Mr. Wright and his examiners 
had been ' ' deliberately and wof ully deceived. ' ' The cause of 
the failure was due to nothing else than criminal mismanagement, 
and under date of December 16, 1876, Mr. David Parks Fackler 
made a further examination which disclosed a most stupendous 
fraud, proof of fraudulent mortgages and fictitious bank balances, 
of borrowed bonds and unstated liabilities, illegal loans and the 
fraudulent attempt to reinsure the business of the company in 
another concern in a similar shaky condition. 

The effect of this failure can readily be understood by any one 
familiar with the effect of public distrust on financial institutions ; 
and when I add that the loss to policy-holders was estimated at 
$965, 161 in cash, to say nothing of the amount of insurance protec- 
tion lost to the unfortunate policy-holders, it will be apparent 
why such a calamity must needs have proven a serious check to 
the business development of a young company offering to the 
working people life insurance on a new and, for the time, rather 
novel plan. 

Considering all the difficulties and drawbacks indicated, it is 
remarkable that during the year 1877 no less than 10,521 new 
policies for a sum of $967,000 should have been issued by the 
Prudential, while 11,226 policies for $1,030,655 remained in force 
at the end of the year. Comparing this result with the fact that 
at the close of the preceding year only 4,816 policies for $443,000 
remained in force, we have a substantial gain in business of more 
than 100 per cent. During a year, in many respects a most dis- 
astrous one from a life-insurance standpoint, the new system of 
life insurance had continued to make progress, although all the 
old-line companies operating in New Jersey actually suffered a 
material decrease in their amount of insurance in force. In 
marked contrast to the success of the Prudential, according to 
the official report of the Insurance Department of New Jersey, 
twenty-six companies operating in the State on the level-premium 
plan decreased in business from 19,266 policies in force at the end 
of the year 1876 to 17,339 policies in force at the close of the year 
1877. 

The total income of the Prudential during 1877 had reached 
$30,868, while the expenses and claim disbursements amounted 
to $24,175. On the basis of a gross valuation the assets of the 
Company were $26,906, against which there were liabilities of 



IOO 



HISTORY OF THE PRUDENTIAL. 



$20,791, showing a small but sufficient surplus. The business of 
the Company, at the end of the year, consisted of 11,226 policies, 
divided as follows, according to the three branches into which the 
business transactions were divided : — 



BUSINESS OF THE PRUDENTIAL INSURANCE COMPANY 

OF AMERICA. 

December 31, 1877. 





NO. 


Amount. 


Sickness Branch, 


10,627 

594 

5 


$1,027,751 00 

2,304 00 

600 OO 


Annuity Branch, 






Total, 


11,226 


$1,030,655 00 





It is quite clear that the sickness and annuity branches of 
the Company's business had assumed only small proportions, and 
the bulk of the business was in whole-life policies for sums pay- 
able at death. The result of the year's experience had therefore 
been emphatically in favor of the transaction of a whole-life 
business, and indicative of only a limited demand for sickness 
insurance and, further, indicative of no commercial demand for 
deferred annuities on the plan offered by the Company. 

Thus far the business of the Company had been transacted 
in the basement of the State Bank building, 812 Broad Street, 
but the increase in clerical work demanded larger quarters, and 
the offices of the Company during the early part of 1878 were 
moved to 215 Market Street. As an indication of the economy 
necessary to be practiced at this time, I may add that the new 
quarters, which were three times as large as the old, were secured 
at a rental of only two-thirds of what had been paid for the 
former offices. 

The success of the Prudential gradually attracted the atten- 
tion of other companies, and, but for the prevailing financial 
crisis, other attempts in the direction of organizing Industrial 
companies would no doubt have been made. But money seeking 
investment was not likely to be attracted to new life-insurance ven- 
tures at a period when the whole business was practically under a 



• Zttf 




HOME OFFICE OF 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

187S-1883. 



THE PRUDENTIAL INS. CO. OF AMERICA, l877-'79. IOI 

shadow and partly in disgrace, and thus the Prudential remained 
alone in the field for some time to come. The subject, however, 
was kept so fully before the insurance companies, through the me- 
dium of the insurance press, by comments on the great success of 
the English Prudential and the limited success of the American 
company of the same name, that it was only a question of time — 
in fact, of only a few months — when improved financial conditions 
would make possible the launching of new enterprises in the field of 
Industrial insurance. A half-hearted effort was made in the early 
part of the year, by the John Hancock Mutual Life Insurance 
Company of Boston, which attempted to transact what it called 
a " Prudential business " on the monthly-premium payment plan, 
offering insurances for sums as low as $250 ; but the experiment 
was not a success. 

It is difficult to explain why the monthly-premium payment 
plan should so invariably have proven a practical failure, but 
the bare fact remains that the people do not seem to care 
for this kind of insurance, even though the plan is actually the 
cheaper in comparison with the weekly plan of general Industrial 
insurance. 

All efforts of this kind, however, had their value, in that 
they made clear the attitude of the public in its preference for life 
insurance on the weekly-premium payment plan, and it was for- 
tunate that every possible species of workingmen's insurance was 
tried either before or at the same time that Industrial insurance 
was passing through the early stages of its development in this 
country. If the new plan of insurance had points of weakness, 
or if the same was ill- adapted to American conditions, the sooner 
it was found out the better. Certainly, nothing would have been 
more disastrous to the cause of genuine life insurance for working 
people than the failure of Industrial insurance, once the system had 
assumed vast proportions. From the standpoint of public policy, 
as well as from the standpoint of the individual policy-holder, it 
was of the utmost importance that Industrial insurance should be 
subjected to every test, difficulty and trial, so that, if failure was 
inevitable, it should take place before the system had grown into 
one of considerable magnitude. It is not too much to say that 
no form of life insurance or other financial undertaking has ever 
experienced more difficulties and been subjected to more trials, 
testing its inherent worth, than was Industrial insurance, as 



102 HISTORY OF THE PRUDENTIAL. 

practiced by the Prudential during the early years of the Com- 
pany's operations. 

As the business of the Prudential increased from year to 
year, more and more intelligent public consideration was given to 
the subject, and, as an indication of the public recognition of the 
value of the new system of insurance, I can not do better than 
quote the following extract from a long article in the Insurance 
World of April, 1878, as an illustration of the conception and 
appreciation of the subject at this period : — 

We think that this system of insurance among the poor if worked up, 
would become as popular here as in England ; some of our leading compa- 
nies should set aside a good sum for the purpose of testing it. The agents 
now in the field could have it under their care, appointing the collectors in 
every workshop, street or village, whose business would be to take risks, 
collect moneys every week or two weeks, and pay it over to the agent. 
The small sums insured, payments made, and the absence of bother, would 
soon recommend it; the poor would take hold of life insurance as they have 
not yet done^ and millions of insurance would be the result. 

The principal value of the article is to be found in the 
earnest plea for insurance for small amounts and premiums pay- 
able on the weekly plan, and, as the Insurance World well said, 
that ' ' If this plan were once placed before the public, millions of 
insurance would be the result. ' ' 

While the Prudential had been successful in introducing 
genuine Industrial insurance on the plan of the British Prudential 
to the working population of the large manufacturing cities of 
New Jersey, other companies, like the John Hancock Life Insur- 
ance Company of Boston, had failed to make a success of the 
plan of monthly-payment insurance ; while the Metropolitan 
had made but a very limited success of its ' ' Bund " or ' ' Union ' ' 
arrangement with various organizations attempting to transact an 
insurance business on the weekly-payment plan. In reference to 
the Bund plan of the Metropolitan, the position of the company 
was well stated in an article in the Spectator for May, 1878, from 
which I quote as follows : — 

The Metropolitan has met with better success in doing so-called indus- 
trial insurance than any other company in the United States. It has done 
this through the agency of a powerful social organization of Germans — an 
aid which no other company has been able to secure for such a purpose. 
In this work the company has undoubtedly extended the benefits of life 
insurance among a worthy class of people, where, without this or some 



THE PRUDENTIAL INS. CO. OF AMERICA, 1877- 79- io 3 

similar agency, but little life insurance business could be done. Small 
shopkeepers, mechanics with small incomes, laborers and others who 
would not ordinarily be induced to look enough at the subject to apprehend 
the benefits of life insurance, or to believe that its benefits were within 
their reach, have been approached by means of this organization — which 
confers substantial benefits upon its members aside from the life insurance 
privileges extended to them — and have been persuaded to protect their 
families by such an amount of life insurance as they could pay for without 
serious inconvenience. 

The Spectator properly speaks of this form of insurance as 
" so-called ' ' Industrial insurance, for an attempt to transact life- 
insurance business on the weekly-payment plan does not, as such, 
represent Industrial insurance as it is understood by those who 
manage the business at the present time. As has been pre- 
viously pointed out, an effort to transact an insurance business on 
the weekly-payment plan had been made as early as 1847, by" the 
Mutual Benefit of Newark, and in 1868 by the American Popular 
Life and other companies ; but these efforts failed, in that no 
provision had been made for the collection of the premiums, the 
insurance of persons at all ages, and the adjustment of amounts 
of insurance to the premiums as a unit, instead of, as is the prac- 
tice in Ordinary insurance, the adjustment of the premium to the 
amount. 

While writers on the subject of life insurance for the masses 
recognized more or less the great value and success of the British 
Prudential in developing in Kngland its system of Industrial 
insurance, there were many who were skeptical as to the question 
whether the system would ultimately prove successful in the 
United States. Among others, the Spectator, then, as now, one 
of the leading insurance publications in this country, in an article 
on the success of the British Prudential, expressed the belief that 
the British form of workingmen's insurance was not likely to 
prove successful among the people of this country, for, it was 
argued, they would not insure for small sums, nor would they 
be willing to pay premiums in weekly instalments, as is the 
practice, and one of the essential principles of workingmen's 
insurance on the Industrial plan. I can not do better than quote 
briefly from the article in the Spectator for May, 1878, as follows : — 

It is not surprising that the report recently made by the Prudential 
Assurance Company of London has attracted a great deal of attention and 



104 HISTORY OF THE PRUDENTIAL. 

elicited extended comment in the United States. The report shows that 
the company has met with very great success in what it calls its Industrial 
Branch, and certainly success in this branch of its business means valuable 
service rendered to a large and needy class of people, who if they did not 
make this or some similar provision would leave their families in poverty 
and generally in pauperism. No words can exaggerate the value of the 
work this company is doing among the laboring people. It promotes tem- 
perance, frugality, thrift and all the kindred mortal virtues, and saves tens 
of thousands from a life of pauperism and crime, and from a pauper's or 
felon's death. 

But those who look upon the success of this company as something which 
can be equalled or even imitated in the United States ignore some patent 
facts. And any company which undertakes that class of business in the 
United States expecting to meet with success comparable with this will cer- 
tainly be disappointed. The failure of the efforts which have hitherto been 
made in this country, in the direction of so-called Industrial Insurance, is 
not attributable to a want of intelligence as to methods nor to a want of 
persistence on the part of officers and agents (albeit these defects have 
characterized the efforts), but to the fact that such insurance is not adapted 
to the population of the country. 

And this naturally leads to the consideration of a field which life 
insurance in the United States has not hitherto cultivated as much as it 
ought to do, and in which good results may be produced. Pretty much all 
the efforts of companies and agents have been made among those who 
could afford or could be induced to take policies for large sums. Many 
solicitors regard time spent in talking about a policy for less than 
$10,000 as time wasted; and $5,000 has been the minimum sum worth 
any consideration at their hands. Of course, the temptation to seek 
those and only those who can afford to pay several hundred dollars 
per annum for life insurance is strong, and the ambition to get ap- 
plications for large policies is a worthy one, but companies and agents 
must thereafter look for the most of their business among another class 
of people, as well as among the same class with reduced incomes and 
modified estimates of their ability to pay and of the requirements of their 
families. 

There are in this country many thousands who need life insurance and 
who can afford small policies — say, from $ r ,000 to $2 ,500 — who have never 
been solicited by competent men. The solicitors who have been sent to 
these persons have been beginners in the work who had not learned how to 
present the advantages of life insurance or the merits of the company they 
represented ; or those who, though not beginners, were incompetent from 
lack of intelligence or lack of industry, and the result has of course been 
failure. If a competent solicitor, one who has hitherto been able to take 
applications for large policies, would go among these people and work 
with as much persistence and enthusiasm as he has customarily employed, 
and with entire frankness, he would find the result profitable to himself and 
any really good company he chose to represent. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1877-79. 105 

On careful examination of this article an experienced life 
underwriter will at once notice that the plea of the Spectator for 
an extension of the principles of life insurance to mechanics and 
others for policies of from $1,000 to $2,500 was really a plea for 
what, in course of time, became known as " special adult 
business " or " Intermediate insurance," as transacted to-day by 
Industrial companies in all parts of the country. This form of 
insurance could not be written on any considerable scale until the 
vast population unacquainted with insurance principles had been 
educated by slow degrees, first, in the habit of systematic saving ; 
second, in a true appreciation of the beneficence of legitimate life 
insurance, even in small amounts as they are returned to policy- 
holders by the methods of the weekly-payment plan. Life insur- 
ance as practiced by the Ordinary life companies during the 
later seventies and early eighties was really class insurance, open 
only to men of considerable income and means. Industrial insur- 
ance, however, did appeal to the industrial population to an extent 
no doubt surprising to those who did not consider the system 
applicable to the United States. And nowhere, perhaps, was this 
tendency more clearly recognized than in a later number of the 
Spectator, published during August, 1878, and in which the truth 
was stated, that ''life insurance is about descending from a 
wholesale to a retail business. ' ' The early error on the part of the 
Spectator is easily explained by the paucity of general information 
on the subject at the time, and the unostentatious manner in 
which the problem of Industrial insurance was actually being 
solved in Newark, less than ten miles distant from New York. 
In justice to the Spectator it must be said that it was not the 
only insurance journal which, at a critical moment, seemed rather 
to oppose the development of Industrial insurance in the United 
States ; for, as a matter of fact, even the Monitor, which had 
at various times done much to call public attention to the prin- 
ciples and practice of Industrial insurance, made unfavorable 
reference to the same in its November issue in 1878. In the 
words of the Monitor, l * the facts leave it more than ever open to 
doubt whether Industrial insurance can be successfully carried on 
according to the Ordinary methods of life insurance," and, rather 
than approving of the British plan of dealing directly with the 
policy-holders, the Monitor expressed the opinion that ' ' The 
company, to be economical, can not deal directly with individuals. 



106 HISTORY OF THE PRUDENTIAL. 

It must work through and deal with subordinate organizations, 
which shall themselves furnish the membership, and relieve this 
great item of cost. If this be true, Industrial insurance can only 
be successfully worked through the ' Bund ' system, such as has 
been adopted by some of the American companies. ' ' 

Fortunately, this advice on the part of the Monitor was not 
heeded, for at the very time one of the leading organizations, a 
well-known German insurance and relief society, with nearly 
7,000 members in different cities, was rumored to be in difficulties, 
and it was not long afterwards when the concern went out of 
existence, its obligations being assumed by a regular Ordinary 
life company. 

However discouraging such remarks as the preceding must 
have been to Mr. Dryden and his associates, the progress of the 
Prudential was never for a moment seriously hindered, though 
the difficulties and discouragements would easily have brought 
institutions resting on a less substantial basis to an early end. 

At a time when Industrial insurance was being actively 
placed before the public, practically every other form of insurance 
for workingmen had either been tried or was now being put for- 
ward, either on the plain basis of a business undertaking in the 
name of assessment insurance, or on the semi-business basis of 
so-called fraternal-insurance organizations. A writer on the 
subject, who seems to have given considerable attention to this 
side of the question, stated that there were then in the United 
States, approximately, 200,000 persons insured in Masonic Orders, 
Odd Fellows' Associations, or other forms of fraternal insurance. 

One of the more prominent and important of these fraternal 
associations was The United Brethren Mutual Aid Association of 
Lebanon, Pa., which by 1878 had reached a membership of some 
13,000. After an existence of twenty-seven years the society 
failed in 1896 in consequence of inherent defects which must 
sooner or later prove the downfall of all similar institutions. The 
pathetic side of such failures has seldom been better brought out 
than in the following letter from Salem, Oregon, published in 
one of the insurance journals during 1896 : — 

When I was a young man I was induced to join the United Brethren 
Mutual Aid Society, which, at that time, was considered the strongest 
fraternal order in existence. I have faithfully paid my assessments for 
nearly a quarter of a century, and now in my old age, when I most need 



THE PRUDENTIAL INS. CO. OF AMERICA, 1877-79. io 7 

insurance and am unable to get it in a regular life insurance company, I find 
myself left without any insurance whatever — because this order, that I 
placed my reliance in, went into the hands of a receiver March 17, 1896. 
* * * * ji seems almost like a criminal act to induce people to place 

their faith in institutions of this kind. 

P. C. Hetzi^r. 

If Industrial insurance had served no other purpose it would 
have full justification for its development in offering a safe and 
substantial substitute for these so-called co-operative or fraternal 
insurance associations. 



io8 



HISTORY OF THE PRUDENTIAL. 



CHAPTER VIII. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1879-1880. 

After a period of three years and two months of actual 
business operations, The Prudential, on January 1, 1879, was still 
the only company transacting Industrial insurance in the United 
States, and, while satisfactory progress had been made, no other 
company had attempted to adopt the plan of The Prudential. 
The number of policies in force, which had been 1 1,226 on Decem- 
ber 31, 1877, had increased to 22,808 policies by the end of 1878. 
The insurance in force had been more than doubled during the 
year, and that, too, in spite of the fact that the business operations 
of the Company were confined to the State of New Jersey. 

The business being now restricted to the insurance of sums 

payable at death, more publicity was given to the premium rates, 

and the following are abbreviated copies of the tables in use at 

this time : — 

INFANTILE RATE TABLE. 

Tabids of Benefits Payable for a 3-Cent Weekly Premium. 
No Higher Premium can be Taken. 

(First used April 2, 1877.) 



Age Last Birthday. 


After Three Months. 


After One Year. 


I 


$IO 


00 


$11 


00 


2 


II 


00 


12 


00 


3 


12 


00 


13 


00 


4 


13 


00 


14 


00 


5 


14 


00 


15 


00 


6 


15 


00 


18 


00 


7 


18 


00 


22 


00 


8 


21 


00 


28 


00 


9 


25 


00 


35 


00 


10 


33 


00 


46 


00 


11 


45 


00 


60 


00 


12 


60 


00 







If the child dies within three months from the date of the contract, no 

insurance will be payable. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879- 80. IO9 

It will be noted that under this table the Company limited 
the premium on policies for persons under the age of thirteen to 
three cents, while no benefit was payable until the child had been 
three months insured. This practice during the early years of 
Industrial insurance is another indication of the conservative and 
cautious spirit which has been such a marked characteristic of 
the managers of The Prudential Insurance Company of America. 

ADULT RATE TABLE. 
The Prudential Insurance Company of America. 1879. 

weekly premiums. 









Twenty-five 




AGE. 


Five Cents. 


Ten Cents. 


Cents. 


Fifty Cents. 


13 


|H7 75 








15 


114 OO 








20 


103 OO 


$206 OO 






25 


90 50 


181 00 


$452 50 




30 


79 00 


158 00 


395 00 




35 


67 75 


135 50 


338 75 




40 


56 75 


113 50 


283 75 




45 


45 50 


91 OO 


227 50 


$455 00 


50 


37 00 


74 00 


185 00 


370 OO 


55 


29 75 


59 5o 


148 75 


297 50 


60 


23 25 


46 50 


116 25 


232 50 


65 


17 OO 


34 00 


85 00 


170 OO 


70 


12 50 


25 00 


62 50 


125 00 


75 


9 5o 


19 00 


47 50 


95 00 



How carefully these tables had been calculated is illustrated 
by the fact that to-day, after twenty years, the rates are practi- 
cally the same, while the benefits have been increased in the 
direction of more liberal concessions, with special reference to 
paid-up policies, cash-surrender values, etc. The only material 
changes or increases in the amounts of benefits which have been 
made are to be found under the infantile table, where larger 
amounts are now paid for the same unit of premium. This is due 
largely to the increased duration of infantile life, or, conversely, 
to the diminished mortality of children under ten years of age 
which has taken place during the past twenty years. 

That the difficulties, disadvantages and even dangers of the 
new experiment in life insurance were fully realized by outsiders 
is incidentally made clear by some remarks addressed to the offi- 
cers of the Company, and especially to Mr. Dry den, at a banquet 



IIO HISTORY OF THE PRUDENTIAL. 

and annual reunion of the officers and agents of The Prudential 
in January, 1879 ; and it may not be out of place to give space 
to a brief abstract of the remarks of Br. Burnett, who spoke as 
follows : — 

In conclusion, gentlemen directors, allow me to give my most agree- 
able testimony to the thorough work done in this office. The Prudential 
Insurance Company of America is skillfully managed on an efficient busi- 
ness basis. Its financial affairs are transacted with rigid economy, united, 
when the interest of the Company demands it, with a most liberal tact. 
There is nothing niggardly here, although every item of expense is sub- 
jected to the closest scrutiny. Gentlemen, your work is well done. * * * 
Never was a " Captain " more ably supported by a lieutenant than is our 
President by our most efficient Secretary. As long ago as June 9, 1873, when 
I had the pleasure of examining the Hon. John Whitehead, the first appli- 
cant for a policy in The Widows' and Orphans' Friendly Society, out of which 
The Prudential arose, he being the President of the Society at that time, 
and Mr. John F. Dry den was the second applicant Jor $1 ,000 in the same 
Society — our Secretary was already revolving in his fertile brain the idea of 
The Prudential Company in America, founded on the same principles as 
the great Prudential of London. He often conversed with me upon the 
subject, and prophesied its coming formation and its coming success. His 
whole soul appeared to be bound up in the idea, and I rejoice that the 
Company has, as its representative in this capacity, a gentleman of rare 
executive ability with a life-love for his work, a true and an honest man — 
God's noblest work. 

This view of the success of The Prudential, increasing public 
appreciation of this form of insurance, the officially attested facts 
indicating the progress and financial solvency of the Company, 
all accessible to the managers of other insurance institutions, 
made it clear that the time was not far off when Industrial insur- 
ance would be undertaken on a larger scale and by other com- 
panies with an ample capital and an established agency force 
likely to prove of material aid in developing new territory. 

The opportunity for new Industrial insurance companies was 
apparent and recognized by many of the insurance journals of 
the period. Thus, in December, 1878, the Insurance World of 
Pittsburg, Pa. , called attention to the fact that ' ' Industrial 
insurance, notwithstanding the expense, is a growing necessity 
in our workshops and factories. Some of our large companies 
might reap a harvest in this direction. The Travelers, if we 
might make the suggestion, is a company well adapted to take 
hold of this work." Thus, by December, 1878, the growing 



THE PRUDENTIAL INS. CO. OF AMERICA, l879~'8o. Ill 

necessity for Industrial insurance was becoming recognized out- 
side of the city of Newark, and in Boston I find that there was 
in existence, in 1879, The St. Peter's Workingmen's Benefit 
Club, in a manner a typical American Friendly Society, with 
73 members, in which dues were paid weekly at a rate of 10 cents 
per member, for insuring $5 a week in sickness, $30 at the death 
of a member, and $15 at the death of a member's wife. As an 
indication of the necessity for public education in matters of 
insurance and savings, I can not do better than quote the remarks 
from the " Massachusetts Labor Report for 1879," published in 
1880, in which it was stated that ''the great multitude of our 
workingmen, for whom almost nothing is done except by way of 
relief when they fall into distress, ' ' represent ' ' the field to-day for 
the best work." 

Official reference is made to the subject in the annual report of 
the Massachusetts Insurance Department for this year, in which 
occurs the statement that ' ' the people are not satisfied with present 
developments or conditions, ' ' and facts seem conclusively to prove 
the increasing popularity of what are termed " Prudential," " In- 
dustrial," " Mutual Benefit," " Mutual Relief," "Co-operative," 
and other plans of insurance, some of the latter having no scien- 
tific basis or financial stability. 

Manifestly, the question of Industrial insurance was now act- 
ively before the public, and neither Insurance Commissioners nor 
the insurance press missed an opportunity to make reference to 
the increasing need for this form of insurance in all parts of the 
country. In the Insurance Times for April, 1879, I find a lengthy 
article on the subject, from which I make a brief quotation : — 

There may be an attraction in placing policies for large amounts on 
the lives of persons who are likely to be prompt in the payment of 
premiums at considerable intervals. But if life insurance be a system 
benevolent in its spirit and beneficent in its workings, the prime object 
should be the diffusion of its blessings among the masses — the good of the 
greatest number, not the great good of the few. No consideration of 
present trouble and vexation should stand in the way. Will it pay ? is the 
only practical and proper question as to any class or condition of life, fust 
as low in the scale of society as the effort can be made self-sustaining, should 
the insurance manager be willing to go. 

The last remark is especially significant. As I have pre- 
viously stated, Industrial insurance companies have never made 



112 HISTORY OF THE PRUDENTIAL. 

it their business to go low down in the scale of human beings 
for the purpose of placing their policies. This would not be 
desirable from a business standpoint as regards a profitable prog- 
ress, since the high mortality prevailing among the lowest poor 
is in itself a sufficient discouragement to their insurance ; but a 
still more serious disadvantage in transacting business among 
paupers, or the lowest poor, is that the requirements of the 
business for the continuance of the policies are not such as to 
make it possible to transact business among them on a profitable 
basis. It can not be too often pointed out that a distinction 
should be drawn between paupers and the poor or lowly, who 
still in their deepest poverty maintain a determined struggle for 
existence upwards and onwards towards a higher and a better life. 
It is something very considerably to the credit of the industrial 
population, or that large portion which work for small and often 
uncertain wages, that they have, nevertheless, within the limit 
of their means, if but for a single five-cent premium, made a 
provision on their own account against life's contingencies, and, 
as it has been so eloquently said by Mr. Dry den, ' ' against a fate 
worse than death. ' ' 

For some curious reason the Insurance Times seems to have 
known very little of the progress of The Prudential even as late 
as April, 1879, for in a lengthy article on the subject, in which 
once more the value and importance of the system is pointed 
out, the editor concludes that ' ' The time is ripe for this 
great and beneficent undertaking. Some one will soon step for- 
ward to secure the profit, if not the laurel. The movement 
ought to be controlled by the large life insurance companies, 
whose abundant means, previous success and matured system 
would inspire confidence. They have the facilities for organizing 
a new clerical force, and for managing the details of the business 
in an economical way. Which of them will be the pioneer in 
America ? The company first in the field is sure of a great and 
profitable success. The moment it announces its intentions it 
will receive a God-speed from the newspaper and press generally, 
and from every true philanthropist. ' ' 

To these words of just appreciation of the necessity for 
Industrial insurance for the industrial population, the Insurance 
Times of April, 1879, adds some further comments, as to the 
probable results of the introduction of this form of insurance 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 113 

into the United States, which subsequent events have fully 
justified : — 

Now the industrial insurance will seize on this circumstance in the 
lives of the lowly. It will become a tie to bind a man to his family. He 
will not only feel that he is doing something beyond what the law will com- 
pel him to do, but he will be reminded month after month, or week after 
week, as the insurance man appears, that he is bound by a tie that will 
require more than ordinary selfishness to break. It is a silken tie, but one 
that may last for life. Nay ! It may be strong even when he sleeps in 
death. For he is rearing a monument of esteem and affection in the heart 
of his family that may have more real grandeur than a cenotaph of marble. 

What will be the effect of this increase of family affection ? Unques- 
tionably higher morals. There will be an additional motive »to lead a good 
life. Home will become attractive. The tavern and bar-room will lose 
their attractions. The society of the family will be preferred to the society 
of the vicious. Those that have failed will be reclaimed. Those that are 
tempted may be confirmed in good purpose. 

This improvement in the social relations may cause, or it may be caused 
by another benefit of industrial insurance. The man will become more 
regular in his business habits, in the employment of his time. It will not 
require the mathematics of the actuary to demonstrate that the parties 
assured will, on the average, earn more difference in money than the 
amount of their premiums. The regularity of the instalment payments 
will tend to make men more methodical. What makes them more method- 
ical will improve their finances. The removal of anxious feeling as to 
the future welfare of their families will tend to make them more efficient. 
And they will not only earn more, but they will spend less on things of no 
account. Great philanthropists have often said that they had none the 
less money for their benevolence. Their habits of life are more productive. 
"Giving doth not impoverish." "There is he that scattereth and yet 
increaseth." Industrial i?isurance will, in a thousand ways, and by a 
thousand circumstances, acting and re-acting on each other, promote at 
the same moment the moral welfare of the assured and improve their 
pecuniary condition. The network of social relations, and of the various 
influences that affect individual mind and action, are so interwoven that 
the whole system grows and expands imperceptibly and inscrutably. 
"Touching one must strike the other, too." 

With the improvement in morals and in material interests will come 
the elevation of the man as a member of the body politic. He will not 
only be lifted higher in the scale of society, but in many cases the mere 
consumer will be converted into a producer. It would require no fertile 
pen to picture the public benefits of industrial insurance. The decrease 
of crime, the stoppage to a great extent of the drain necessary to provide 
the benevolent institutions required by destitution and infirmity, the 
saving to the State in the cost of maintaining its criminal jurisdiction and 
supporting its reformatory and penal establishments, the addition to its 
tax-paying population, the improvement of the public health, and the 



114 HISTORY OF THE PRUDENTIAL. 

increase of longevity, are only some of the public benefits that will grow 
out of this beneficent system. 

These just and prophetic utterances were made by a writer 
familiar with the results which Industrial insurance had already 
achieved in England ; and it is not too much to say that seldom 
has prophecy been more fully realized than in the case of Indus- 
trial insurance — to-day, from the workingman's standpoint, at 
least, the most satisfactory method of providing for the contin- 
gencies of life, and of securing widows and orphans -against 
pauperism and want in many forms. 

The article from which I have quoted at length was no 
doubt largely instrumental in calling the attention of insurance 
companies to the increasing importance of Industrial insurance, 
and, in fact, the same number of the I?isura?ice Times* contains 
a reference to the fact that several New York life-insurance 
companies were contemplating the adoption of the plan of 
Industrial insurance, while one, the Provident Savings Life As- 
surance Society, had actually organized an Industrial insurance 
department, under the supervision of an English gentleman 
familiar with the methods of the British Prudential. The Provi- 
dent Savings was, therefore, the first of a number of regular 
Ordinary companies to follow the lead of The Prudential in trans- 
acting an Industrial business on the plan of the British Prudential. 
The Provident Savings, however, failed to recognize all of the 
essential principles, and seems never to have entered seriously and 
energetically upon the transaction of this form of insurance. The 
company never attempted to push this class of business even in 
the very beginning, and after a few }^ears the Industrial branch 
was discontinued. 

Closely following the organization of an Industrial depart- 
ment on the part of the Provident Savings, came an attempt on 
the part of some of the officers of the New York Life, who 
had associated with themselves Mr. Bassett, the first President 
of The Prudential Friendly Society, for the purpose of organiz- 
ing the Industrial Insurance Company of the United States. 
The new company proposed to issue policies from ages one to 
seventy-five, and furnish insurance in sums ranging from $50 to 

* Insurance Times, April, 1879, P- 2 3 2 - 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 115 

$500 to the poorer classes, receiving the premiums in weekly 
or monthly instalments. The payments were to range from 
three cents to fifty cents a week, but, for reasons which can not 
now be ascertained, the company did not assume a corporate 
existence, although an effort seems to have been made to organ- 
ize the same on a substantial basis. Both Mr. Beers and Mr. 
Franklin, as officers of the New York Life, were among the 
incorporators, but it would appear that the effort was only a half- 
hearted one, probably due more to Mr. Bassett's influence than 
to a strong inclination on the part of the officers of the New 
York Life. In making reference to this effort to organize a new 
Industrial company, the Spectator, in its October issue of 1879, 
referred to The Prudential and the results which had been accom- 
plished as follows : — 

The Prudential, of Newark, has been extremely successful thus far, and 
we have no doubt but the application of the same principle to a more 
extended field will meet with equal success. It is but justice to state, in 
this connection, that The Prudential, of Newark, is largely indebted to its 
Secretary, John F. Dryden, for the success which it has realized. His 
ability and indefatigable industry have been incessantly devoted to the 
furtherance of this system of insurance, of which he was the original 
promoter in this country. Having been so successful in New Jersey, the 
Company is about to commence business in New York State. 

Before I deal with the extension of the business of The 
Prudential to other States than New Jersey, I must briefly 
notice an effort to establish an Industrial insurance company in 
Massachusetts, by the John Hancock Mutual Life Insurance 
Company of Boston, which, as has been stated, had commenced 
the issue of monthly policies on what it called The Prudential 
plan, as far back as January, 1878 ; but it was in this year, 
in August, 1879, that it commenced the issue of regular 
Industrial policies on the weekly -premium payment plan, identi- 
cal in most respects with the methods and practice adopted by 
The Prudential of Newark, after the model of the Prudential of 
England. This effort on the part of the John Hancock proved a 
success, and the company is to-day the third largest Industrial 
insurance company in this country. 

At the same time that the Provident Savings and the John 
Hancock were making efforts to extend Industrial insurance, 
another large company had had the question under consideration 



n6 



HISTORY OF THE PRUDENTIAL. 



for some time, and seems to have been actively engaged in the 
study of Industrial insurance in England through its president, 
who, immediately upon his return, took steps to organize an 
Industrial branch, out of which in time developed the largest 
Industrial insurance company of America, — The Metropolitan 
Life Insurance Company of New York. 

The first Industrial policy of the Metropolitan was issued on 
the 17th of November, 1879, or just four years after The Pruden- 
tial had commenced actual business operations, — on the 10th day 
of the same month in 1875. Thus, by the close of the year there 
were four companies actively engaged in the business of Industrial 
insurance, and it may be of more than passing interest to give 
the results accomplished, as shown by the returns of the business 
in force December 31, 1879 : — 

INDUSTRIAL INSURANCE IN THE 
UNITED STATES. 1879. 





No. 


Amount. 


Average Policy. 


Provident Savings, 

John Hancock, 

Metropolitan, 


43,715 

1,947 
9,327 
5,143 


$3,866,913 00 
258,033 00 
951,000 00 
516,618 00 


$88 00 
133 00 
102 00 
100 00 


Total, ... 


60,132 


$5,592,564 00 


$93 00 



This table shows that there were in force in 1879 in The 
Prudential 43,715 policies, while the four companies together 
had over 60,000 policies in force. While only four companies 
are included in the above table, there was still another, 
The Germania L,ife Insurance Company of New York, which 
also during the month of November * had commenced the 
transaction of an Industrial business, but for which the returns 
are not available for the end of the calendar year, 1879. 

Thus by January 1, 1880, five companies were in the field, 
and the history of Industrial insurance thereafter is no longer 
exclusively the history of The Prudential Insurance Company. 



* By a curious coincidence the first Industrial policy of the Germania 
was also issued on the 17th of November, 1879. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 117 

The object of Mr. Dryden's efforts had been accomplished : 
Industrial insurance had been proven a success, the business 
had been established on a substantial and scientific basis, 
and all the companies which followed The Prudential fol- 
lowed its lead in placing the Industrial business on a sound 
financial foundation, and for this reason there has never been 
a single failure of a legitimate Industrial insurance company 
in the United States. To this is due the fact, in marked con- 
trast to the history of the thousands of attempts at pseudo- 
insurance transacted under various names, that not a single 
dollar has ever been lost to a policy-holder in an Industrial 
company on account of financial insolvency, or the shameful 
betrayal of a sacred trust. 

Near the close of the year 1879 The Prudential had taken 
steps to increase its capital to $100,000, to provide the necessary 
deposit to enter the State of New York. Men of exceptional 
ability had been induced to enter the service of the Company and, 
among others, Mr. John F. Collins, who had been the Secretary 
of the Republic L/ife of Chicago, was placed in charge of the 
Company's business in Philadelphia, while Mr. George H. 
Thornton, ex-President of the John Hancock Mutual L/ife, 
was given charge of the office of the Company in the city of 
New York. The Philadelphia Underwriter ■, in making mention 
of the extension of the operations of the Company, referred to 
the opening of an office in Philadelphia, stating that ' ' We trust 
that under the lead of the efficient gentlemen and their coadju- 
tors, who now direct the affairs of the Company, its career may be, 
over a large extent of territory, as nobly efficient as it has been 
in Newark and vicinity . ' ' 

The Insurance Monitor, in November, 1879, in referring to 
the admission of The Prudential to the State of New York, 
referred to the Company as follows : — 

The Prudential Life Insurance Company of New Jersey has been 
admitted to the State of New York, and has taken offices in the Astor 
House, where the headquarters of the company will henceforth be. This 
institution has been, for several years, quietly at work in New Jersey, and 
the amount of business which it has placed upon its books is something 
amazing. It is the first practical illustration of what can be done in 
Prudential life insurance that has yet been furnished by an American 
institution, and we shall look with great interest for its future develop- 
ment. 



Il8 HISTORY OF THE PRUDENTIAL. 

Before the Company had been admitted to the State of New- 
York its affairs had been thoroughly investigated under the 
direction of the Secretary of the State of New Jersey, by so 
high an actuarial authority as Mr. David Parks Fackler. I 
quote from the Spectator of November, 1879, a brief statement 
in reference to this examination : — 

Recently the stockholders of the company paid in an additional 
$100,000, and now propose, as soon as the details are arranged, to prosecute 
business in the States of New York and Pennsylvania. The sum of $100,000 
has been deposited with the New Jersey State Treasurer, and, at the request 
of the company, its affairs have been thoroughly investigated, Secretary 
of State Kelsey employing D. P. Fackler, the well-known insurance 
actuary, to value its liabilities and to critically examine not only the 
assets of the company, but its methods of doing business. The reports 
upon both heads are exceedingly complimentary to the management of 
the company. The Prudential is conducted upon precisely the same 
plan as the Prudential of London, one of the largest and wealthiest life 
companies in the old country. Hundreds of instances might be mentioned 
where a policy in The Prudential has saved the insured from being buried 
in a pauper's grave at the expense of the public. It will be seen that 
the purposes of the company are beneficent in the highest degree, and we 
have no doubt but it will meet with continued success in its enlarged 
sphere of usefulness. 

As has been stated, by the first of January, 1880, The Pru- 
dential had 43,715 policies in force, for a sum of $5,866,913 of 
insurance protection. From the beginning the Company had acted 
upon a principle, from which it has never deviated during the 
course of more than a quarter of a century of Prudential history, — 
and I can not do better than quote Mr. Dryden's views on this 
point, from the annual letter to the field force, dated January 2, 
1900, in which I find reiterated what had so often been expressed 
in earlier official communications : ' ' By word and pen we have 
made it known that The Prudential seeks only to surpass its own 
record." This policy of conservatism and prudence has char- 
acterized the development of the Company from the date the first 
policy was written, on November 10, 1875, and how early and 
fully this policy was appreciated by the public is indicated by a 
statement in the Insurance World of 1880 : — 

That the subject of industrial insurance has been so much neglected in 
the light of its success elsewhere, is a source of considerable surprise. 
However, within the last couple of years the subject has received more 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 119 

favorable attention. A few of the regular life companies have been push- 
ing an industrial branch with a reasonable amount of success, whilst one 
company, The Prudential, of Newark, has been making a specialty of this 
class of insurance, and by not endeavoring to do too much at once, but to 
cover thoroughly each field as it slowly extends its operations, bids fair in 
a few years to become a household word with our working classes. 

This prediction on the part of the Insurance World has 
been more than fulfilled during the later years of Prudential 
history, and it is not too much to say, without vanity or 
vainglorious pride, that the name of The Prudential and 
its motto, ' ' The Prudential has the strength of Gibraltar, ' ' 
are to-day household words in America from Maine to Cali- 
fornia. 

By 1880 the subject of Industrial insurance had attracted 
sufficient attention to receive special consideration in the annual 
report of the Massachusetts Insurance Commissioner. The Com- 
missioner called the attention of the Legislature to the successful 
introduction of the system by several companies authorized to 
transact business in Massachusetts, stating that ' ' Though 
somewhat experimental in its present stage of development in 
this country, its success has thus far exceeded all expectation. 
Being especially adapted to the poor and laboring classes, its 
material and timely relief, so promptly furnished in seasons of 
pressing need, is proving itself a welcome boon to multitudes 
of grateful beneficiaries." However, a weak point was referred 
to by the Commissioner, which, though fully provided for by 
the managers of The Prudential, seemed to require legislative 
action. In the words of the Commissioner, ' ' The present 
laws of the State fail to provide a proper standard of reserve 
for this plan of insurance, a very large portion of its policies 
not coming within the rules of valuation applicable to other 
insurance." With this end in view, a bill to regulate the busi- 
ness had been introduced into the Legislature, but failed of 
passage ; but, as far as The Prudential was concerned, it had 
from the beginning provided an adequate reserve for all its 
policies, and this practice has been rigorously adhered to up 
to the present time. One important point had been gained, 
however, and that was that by 1880, after a little more than four 
years of actual business operations on the part of The Prudential, 
the business had increased sufficiently in extent to be officially 



120 HISTORY OF THE PRUDENTIAL. 

recognized as a distinct branch of legitimate life-insurance prac- 
tice. One other problem, however, had attracted the attention 
of the Insurance Commissioner, as a serious question confronting 
the Company, and that was the valuation of policies on the lives of 
persons under ten years of age. In a special report on the subject, 
the Deputy Commissioner of Insurance of Massachusetts, under 
date of August 30, 1880, stated that "In attempting to apply the 
provisions of the general insurance laws to the regulation of the 
business of Infant Prudential Insurance,* we are met at the outset 
with the fact that for the valuation of such policies no standard 
is either fixed or provided for, and therefore, so far as the general 
law is concerned, the inference might be that this form of policy 
is not recognized as a life-insurance contract, but the charters of 
the companies operating this plan of insurance empower them 
' to do insurance upon lives ' without reference to ages, and thus 
place beyond question the legitimacy of the business. ' ' 

The value of this official reference to Industrial insurance 
lies in the fact that, according to the highest authority on insur- 
ance interests, the insurance of persons of young ages was fully 
as legitimate as the insurance of adults. The essential point in- 
volved was that the so-called infantile policies were policies on per- 
sons under the age of — say — thirteen, and no reserve was required, 
since the mortality at the younger ages diminishes constantly 
from age o until ages 13 to 15 are reached. After this age the 



* The term " Infant Prudential Insurance " is a misnomer and equally 
misleading with another frequent expression, viz., "Child Life Insurance." 
There is no such business as •' Child Insurance," per se, since not a single 
company confines its operations exclusively to the insurance of children, 
and the expression has no more justification than there would be in speak- 
ing of " Wife Insurance " because the companies, as part of their regular 
business, accept risks on women as well as on men. The term "Child 
Insurance" or "Child Insurance Companies" has of late years been fre- 
quently employed by opponents to this system of insurance, for the delib- 
erate purpose of misleading the public into the belief that the Industrial 
companies make a specialty of, or confine their operations exclusively to, 
the insurance of children under the age of thirteen. As a matter of fact, 
the proportion of children insured with the large companies is practically 
identical with the normal proportion of persons under the age of thirteen in 
the United States. In The Prudential the proportion of deaths at ages one 
to fifteen, during the period i89i-'98, was 23.4 per cent, against a propor- 
tion of 26.9 per cent, for the city of New York. 



THE PRUDENTIAL INS. CO. OF AMERICA, l879-'8o. 121 

mortality gradually increases to the oldest attainable age, and to 
adjust this factor in an equitable manner The Prudential from 
the beginning had followed the practice of the English Prudential 
Assurance Company, and had devised a table by which the pre- 
miums remained level while the amounts payable at death increased 
from age i to age 13, after which the amounts remained the same 
for life, subject in later years to increased benefits or dividends, 
or surrender-value privileges, as the case might be. To illustrate 
this point, I reproduce in full the first infantile table used in 
the United States by The Prudential Insurance Company of 
America : — 

FIRST INFANTILE RATE TABLE USED BY THE PRUDENTIAL. 



Table of Benefits Payable for 3 Cents a Week. 



No Higher Premium Can be Taken. 

(Benefit payable if child dies after three months and within one year after 
policy has been issued.) 



Age Last Birthday When Policy Was Issued. 



Benefits Payable if Child Dies After 
the Policy has been Issued. 

For 3 months, 

" 1 year, 

11 2 years, 

" 3 " 

4 

<« - <« 

"6 " 

"8 " ......... 

"9 " 

"10 " 

"11 " ...... . . . 



1 


2 


3 


4 


5 


6 


7 


8 


9 


10 


11 


$10 


$11 


$12 


$13 


$14 


$15 


$18 


$21 


$25 


$33 


$45 


II 


12 


13 


14 


15 


18 


22 


28 


35 


46 


60 


12 


13 


15 


17 


20 


24 


29 


37 


47 


60 




14 


16 


18 


21 


25 


30 


38 


48 


60 






17 


19 


22 


26 


32 


39 


48 


60 








20 


23 


27 


32 


40 


49 


60 










25 


28 


33 


40 


49 


60 












30 


34 


40 


5o 


60 














35 


40 


50 


60 
















40 


50 


60 


















50 


60 




















60 























12 



This table, according to Mr. Dry den, in a statement made 
before the Massachusetts Legislature in 1895, was the only- 
infantile table used by the Company for eight years, but at the 
expiration of that period it was found, ' ' after carefully testing 



122 HISTORY OF THE PRUDENTIAL. 

the matter," that the laboring man needed more insurance for 
his children, and that higher premiums would have to be 
accepted to meet the needs and wants of the industrial masses ; 
and with this end in view tables were prepared on which five- 
and ten-cent premiums were accepted, though the general plan 
and arrangement of the table were not changed, being the same 
in theory as well as in practice at the present day. 

The entire subject of Industrial insurance, with special 
reference to valuations and reserves, was referred to a special 
committee of Insurance Commissioners, who in their report 
recommended that ' ' for the purpose of computing reserves on 
policies issued at the ages under twelve years the valuations 
should be as for renewable term policies, no charge being made 
for reserve upon policies running on weekly or monthly premi- 
ums, ' ' and, further, that ' ' policies issued upon the plan set forth 
for sums under $500 of insurance shall not be held subject to 
the provisions of non-forfeiture acts, because of the almost 
infinitesimal amount of the benefit thereunder ; or to such laws 
as require notice of the falling due of premiums to be sent to the 
policy-holder, as the frequency of these payments makes the 
labor and expense of such notices impracticable." 

In consequence of these recommendations, by October, 1880, 
Industrial insurance had a recognized standing before the Insur- 
ance Commissioners of the different States, and a high sense of 
justice seems to have dictated the resolution that the many intri- 
cate problems resulting from the practice should be dealt with 
by the companies in their own way, in full confidence that the 
latter would deal equitably with their policy-holders, in the light 
of their own experience and in consequence of the increasing com- 
petition in the number of companies engaged in the business. 

As the business was extended, its technical side naturally 
received increasing attention. From the beginning, serious at- 
tention had been given to one of the most important questions 
with which The Prudential has had to deal, and which even at 
the present time represents one of the most complex problems 
in Industrial insurance, — namely, the question of forfeiture of 
benefits on contracts which have been voluntarily surrendered 
by the insured. As has been stated, the Committee of the 
Insurance Commission Convention had recommended that Indus- 
trial policies should not be subject to non-forfeiture laws, since 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 1 23 

the small amounts at risk would not warrant the application of 
non-forfeiture principles to Industrial policies ; neither was there 
need for legislation on the subject, since the companies engaged in 
the business, acting on competent actuarial advice, had done what 
they could to prevent the lapsing of policies, first, by holding 
agents personally responsible for such lapses,* and, second, by 
giving to lapsed policy-holders not only a period of grace of 
four weeks, but every opportunity to revive lapsed policies with- 
out fines or other expense, and subject only to an examination or 
evidence of the health of the applicant at the time of reinstate- 
ment, to the effect that applicant was not an impaired risk. The 
Prudential, however, early recognized the need of energetic action 
in reference to lapsed policy-holders, and during the early part 
of 1880 issued a circular letter, which was sent to policy-holders 
in default or arrears for premiums : — 

[Form No. 146] 
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 



- 1880. 

M 

Polic No 

This is to notify you that I called this day to collect your Premiums 

now weeks in arrears. 

Unless the same are paid when I call again, on next, 

the rules of the Company will compel me to lapse your Policy. 

Very respectfully, 

Agent. 



* Agents are paid a commission for writing new insurances, but only in 
case an actual increase is made in the weekly collectible premiums. Thus, 
if an agent lapses two policies for, say, twenty cents of weekly premiums, 
and writes three new policies for thirty-five cents weekly premiums, he 
will be paid a commission on only fifteen cents of new premiums. By this 
method it is vitally to the interest of every agent to keep every policy in 
force, since every lapse represents a direct financial loss. 



124 HISTORY OF THE PRUDENTIAL. 

Should a policy have lapsed regardless of this notice of warn- 
ing, a further notice was sent to the lapsed policy-holder, offer- 
ing an opportunity for revival of the same without loss or cost to 
the insured, provided the same was in good health at the time 
application for revival was made : — 

Newark, 1880. 

I have to inform you that our Agent reports the premium on the 

above Polic as last paid for the day of 

1880, and the Polic ha therefore been lapsed. 

A lapsed Policy may be revived upon paying the premiums in arrears, 
and furnishing satisfactory evidence of the good health of the person upon 
whose life the Policy was issued. 

Unless a lapsed Policy is so revived, all benefit under the same is for- 
feited. Should you wish to continue the insurance, please take this card 
and your Premium Receipt Book to the Agent (or bring them to this office), 
and pay the premium. 

I remain, very truly yours, 

John F. Dryden, 

Secretary. 

It is thus quite clear that the Company made every reason- 
able effort to keep the insured from lapsing his policy, or, if such 
lapse had taken place, to induce the lapsed policy-holder to revive 
the policy by payment of arrears. It is easy, of course, to find 
fault with this perhaps somewhat crude arrangement, but it was 
the best that could be made at the time without placing in jeop- 
ardy the interests of persistent policy-holders, the consideration 
of whom must always outweigh that of those who, for some 
reason or other, default in their contract obligations. 

What was true of the lapse question was equally true of the 
question of granting partial immediate benefits. On an Indus- 
trial policy only a single week's premium had been paid to 
secure the policy, and since, in view of this fact, a single five- 
or ten-cent premium made the Company responsible for a con- 
siderable sum, it had been at first the practice to deduct, in case 
of death, the unpaid part of the annual premium, computed on 
the basis of fifty-two weekly premiums payable during the 
year. This practice had not been satisfactory to the insured, 
and the general provision in adult policies was that, of the sum 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 125 

insured for under the policy, no benefit should be payable if death 
occurred during the first three calendar months following the 
date of issue of the policy, one-fourth of the amount if death 
occurred after three calendar months and within six calendar 
months, one-half of the sum insured for was payable if death 
occurred after six calendar months and within one year, while 
the full amount of the policy was not due until the policy had 
been in force one complete year. This precaution was justified 
and made necessary by the fact that no medical examination was 
required on policies for sums of less than $200, while only a super- 
ficial medical examination was required for sums above that 
amount. No doubt, in consequence of increasing competition, 
The Prudential found it necessary, during January, 1880, to 
change this plan and grant immediate benefit for one-half the 
amount stated on the face of the policy : — 

Newark, N. J., January 23, 1880. 

Dear Sir : — By virtue of a resolution this day passed by the Board of 
Directors, all Adult Policies hereafter issued by this Company will be 
placed in immediate benefit for one-half the amount stated on the face of 
the Policy. 

All Infantile Policies will also be put into immediate benefit from day 
of issue, instead of at the expiration of three months as heretofore. 

You are authorized to inform the members in your Agency that the 
Company will, without expense to the insured, if desired, issue a new 
policy containing the stipulation above set forth, upon the policy being 
forwarded to this office for cancellation. 

If the member prefers to retain the policy already issued, the Com- 
pany will treat Adult Policies as in one-third benefit for the first six months 
and two-thirds benefit the last six months of the first year. 

Infantile Policies already issued will also be treated as in immediate 
benefit. 

I trust this action of the Board of Directors will be another evidence 
to you that The PrudenTlax, while it is determined to take no hazardous 
step, will strive to deal with its members in a spirit of the utmost liberality 
consistent with safety. 

John F. Dryden, 

Secretary. 

This concession to the policy-holders was doubtless prompted 
by the increasing competition and consequent excessive rivalry 
among the agents. The business was new and, as regards adverse 
selection, much had yet to be learned. For a time the more 



126 



HISTORY OF THE PRUDENTIAL. 



liberal benefit provisions prevailed, but subsequent experience 
proved that a somewhat more restrictive policy was necessary 
for the protection of the Company and its policy-holders. 

Partly in response to increasing competition, largely because 
of an increasing demand, The Prudential in 1880 commenced the 
issue of a new form of Industrial policy for the round sum of 
$500, with premiums differently adjusted, but payable on the 
weekly plan. A copy of this table is given below, together with 
the explanatory statement that, in case of death during the first 
policy year, one-half of the amount was payable, while the full 
amount was payable after the policy had been in force a complete 
year : — 

FIVE-HUNDRED-DOLLAR ADULT POLICY OF THE PRUDENTIAL 
INSURANCE COMPANY OF AMERICA. 



Age Next 


Weekly 


Age Next 


Weekly 


Birthday. 


Premiums. 


Birthday. 


Premiums. 


20 


$0.24 


43 


$0.50 


21 


•25 


44 


•52 


22 


.26 


45 


•55 


23 


.26 


46 


•57 


24 


.27 


47 


.60 


25 


.28 


48 


.62 


26 


.28 


49 


.65 


27 


.29 


50 


.68 


28 


•30 


5i 


.70 


29 


•31 


52 


•74 


30 


•32 


53 


•77 


31 


•33 


54 


.80 


32 


•34 


55 


.84 


33 


•35 


56 


.88 


34 


.36 


57 


.92 


35 


•37 


58 


.96 


36 


.38 


59 


1. 01 


37 


.40 


60 


1.08 


38 


.41 


61 


LIS 


39 


.42 


62 


1.22 


40 


•44 


63 


1.28 


4i 


.46 


64 


i-35 


42 


.48 


65 


1.47 



One-half benefit first year and full benefit after one year. 

Noah F. Blanchard, 

President. 

John F. Dryden, 

Secretary. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 127 

This table was a decided boon for employees or wage- 
earners of a higher grade, engaged in remunerative industrial 
occupations, since it made possible insurance on the plan of 
weekly payments, combined with the collection of the pre- 
mium from the house of the insured, for sums as high as 
$1,000, for men who, on account of their occupation or for 
other reasons, were not likely to obtain insurance with Ordinary 
companies. It was also the first step in the direction of what 
in later 3^ears became known as Industrial-Ordinary insurance. 
It was a first step in that slow and difficult process of insur- 
ance education of the masses, through the medium and methods 
of Industrial insurance. 

With the growth of the business, the legal aspect of Indus- 
trial insurance, the relation of the Company to its policy-holders, 
the opportunities for misunderstanding and misconstruction of 
policy terms, as well as the occasional instances of fraudulent 
practices on the part of agents and policy-holders, made it neces- 
sary that the law department of the Company should be reorgan- 
ized on a more satisfactory basis, and accordingly Mr. Kdgar B. 
Ward, since 1875 a Director and since 1876 the Attorney of the 
Company, was this year, under date of February 9th, elected 
Counsel and, subsequently, Second Vice-President. It is largely 
due to Mr. Ward's efforts that the Company has had few legal 
difficulties, few contested claims and practically no important 
lawsuits. As a member of the Finance Committee Mr. Ward 
has given much of his time and devoted much of his ability to 
the investments of the Company during the past twenty years, 
and the financial interests of The Prudential have been so ably 
protected that no life company can boast of a better record of 
safe and remunerative investments than The Prudential Insur- 
ance Company of America. The Company's proud claim to 
' ' The Strength of Gibraltar ' ' has its foundation in the con- 
servative manner in which its finances have been managed, 
and it is but proper that full credit should be given to 
Mr. Edgar B. Ward, as one of the founders of Industrial 
insurance in America. 

The question of life insurance for children for small sums 
sufficient to pay the funeral expenses, and to provide for the cost 
of the last illness, received public consideration this year not only 
in the insurance press, but in many of the newspapers of the 



128 HISTORY OF THE PRUDENTIAL. 

period.* I can not do better than quote from the Weekly Under- 
writer of July 24, 1880, an article on this subject of exceptional 
interest : — 

We have noticed recently, in several journals, an implied donbt of the 
propriety of permitting the practice of that part of industrial life insurance 
which deals with the infantile population, and a case is cited, in Baltimore 
we believe, where there were suspicions of infanticide in connection with 
the death of a child insured in one of these companies. Experience makes 
sad work of our theories sometimes, and the theory that murder will be 
committed on helpless babes for the small sums for which they are insured 
has no basis of fact to sustain it. 

We might fairly go further, and say that aside from the facts there is no 
reason to believe that the natural love of parent for child, which beats as 
strongly under the coarser vest as under the costliest, can be stifled and 
changed to a criminal action for a sum of money which, at best, merely 
provides a decent funeral for the dead child. 

It must be understood that industrial policies average less than one 
hundred dollars and that in the case of infants, or children under four 
years, they do not exceed one-fifth of that sum, and that they are guarded 
against criminal intent in their inception by very materially limiting the 
benefits under them, for a number of months. The parents who would 
murder a child for the insurance would murder it to avoid the burden of 
supporting it, the lifting of which would prove a far greater relief than the 
receipt of ten or fifteen dollars of insurance money. Opinions, however, 

* An earlier attack on the practice of insuring the lives of young chil- 
dren had been made in the Trenton True Anierican under date of March 26, 
1878, on the basis of an article in the Pall Mall Gazette in which charges 
of child murder and neglect for insurance money had been made in the usual 
manner without evidence or instances of authenticated facts. In com- 
menting on the article the True American said : — 

" Such a paragraph as this almost destroys one's faith in human nature. 
It is difficult to conceive the deep depravity to which the facts commented 
upon bear witness. But since it does exist, it seems to us that the Courts 
should prevent its accomplishing its purpose by holding all policies of 
insurance obtained by parents on the lives of their children invalid, as 
against good morals and public policy. It is not only the inducement 
which inhuman parents, devoid even of that instinct which leads the brute 
creation to care for its young, find in insurance on their children to ill- 
treat them or put them out of the way, but it is the tendency to cause them 
to neglect their children in their sickness, and, moreover, the demoralizing 
effect produced by parents speculating on the lives of their children. The 
insurance of children by parents is a reversal of the entire object of life 
insurance, it ought to be forbidden by law, and the Courts should stamp 
it out as a dangerous incentive to crime." (Trenton True America?i, 
March 26, 1878.) 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 129 

are of very little use in the presence of statistics, and, fortunately, we are 
not compelled to rely upon opinion in this case. 

This same charge was brought against the business by the Friendly 
Societies Commissioners in England, who, commenting on the report of 
a select committee of the House of Commons, state they " can not agree 
with the opinion expressed by the House of Commons committee, that 
the instances of child murder with a view of obtaining money from a burial' 
society are very few." The Committee of Management of the Royal Liver 
Friendly Society, one of the largest of these societies — we believe with 
the exception of the Prudential the largest — immediately on becoming 
aware of these opinions expressed by the commissioners, resolved to make 
a complete investigation of their experience, which was done under the 
direction of Mr. Sprague, the eminent English actuary. His report, made 
in 1875, is before us with the figures, giving that society's experience, 
the observations covering 122,696 lives. His deduction from the figures 
is : — 

"An examination of these figures proves conclusively that the sus- 
picions of the commissioners are unfounded as regards the children insured 
with the Royal Liver Society. If any appreciable number of such children, 
residing, for example, in Liverpool, were destroyed by their parents or 
other persons in charge of them, for the sake of obtaining the insurance 
money, it is clear that the mortality among the children whose lives were 
insured in the Liverpool district would exceed that among the children 
belonging to the general population of Liverpool. But instead of this the 
exact contrary is the case. The rate of mortality among the insured 
children is very greatly less. ' ' 

Mr. Sprague's testimony, or rather the testimony of his figures, does 
not stand alone. Any person who reads the history of the Prudential 
Assurance Company can not accuse its manager, Mr. Henry Harben, of 
carelessness in arriving at conclusions. Every step in the progress of that 
company has been marked by the most painstaking care and the most 
laborious study. In recording its experiences on infant lives, Mr. Harben 
says : — 

"The records of the policies issued under this table have been most 
carefully observed, and while the numbers of lives admitted are counted 
by millions, the experience of the company completely negatives the idea 
that malfeasance generally is practiced, for in the twenty years during 
which the practice of infantile assurance has been carried on, no such case 
has been known to have occurred, and only two in which the circumstances 
were of a distinctly suspicious character." 

This would seem to close the case as far as the business in Great 
Britain is concerned. It may fairly be presumed that the companies 
engaged in industrial insurance in the United States have given this 
subject some thought before engaging in it. Certainly, all the arguments 
for the views of those who consider infantile insurance provocative of 
murder are stronger in England than in the United States. Among our 
population children are not felt to be the burden they are in more crowded 
communities. We have not yet arrived, as England has, at a point where 



130 HISTORY OF THE PRUDENTIAL. 

a restriction of the birth-rate is discussed as a question of moment. Oppor- 
tunities for parents to become proud of their children are more plentiful 
here than in Europe. 

If, then, we find as an actual fact that no such calamity as child 
murder follows infantile insurance among the crowded and squalid popula- 
tion of London and Liverpool and Birmingham, there is little reason to 
apprehend it in New York or Boston or Philadelphia ; and no cause for 
doubting the wisdom of a scheme which promises the benefits of life insur- 
ance in small quantities to those who are unable to buy in large quantities. 

This plain statement of the merits of the case in the Weekly 
Underwriter is deserving of the most serious consideration on the 
part of those who would find fault with the practice of Industrial 
insurance companies in accepting risks on the lives of young 
children for small amounts. 

The Prudential had, from the beginning, carefully observed 
the local conditions affecting the business, with special reference 
to that part or branch which concerned the insurance of children at 
young ages, and by 1880 it was demonstrated, by the vital statistics 
of the city of Newark, that instead of there having been an increase 
in the mortality of children since the commencement of Industrial 
insurance, there had actually been a material decrease, so much so 
that, while the number of deaths at ages one to nine, inclusive, 
had been 1,058 during 1876, there had been 934 deaths during 1877, 
722 deaths during 1878, 618 deaths during 1879, and only 520 
deaths during 1880. This was in a city where The Prudential 
had transacted the larger part of its business, and where a con- 
siderable number of children over the age of one had been insured. 
From that day to this the mortality of children, not only in the city 
of Newark, but in all the cities in the State of New Jersey where 
Industrial insurance is transacted, has materially decreased. It 
certainly stands to reason that if the insurance of children had 
exerted an unfavorable influence on the duration of child life this 
considerable decrease in the mortality would have been impossi- 
ble in a State where, at the present time, the larger portion of the 
child population is insured in Industrial companies. The subject 
has received further attention during later years, and will be 
referred to again in its proper place. 

By slow degrees the opinion of the insurance journals and 
intelligent public opinion in general changed to a uniform ap- 
proval of the system of Industrial insurance. It was becoming 
apparent that the new form of life insurance was unlikely to prove 



THE PRUDENTIAL INS. CO. OF AMERICA, 1879-80. 131 

a dangerous element as regards the mortality of children, or an 
undesirable factor in competition with Ordinary companies, but 
rather, to the contrary, it was evident that the general diffusion of 
insurance knowledge and principles among the masses was likely 
to increase very materially the general demand for life insurance 
on the Ordinary plan. A very clear and comprehensive view of 
the matter is to be found in an article in the Insurance Times for 
March, 1880, from which I quote : — 

In this way a poor man may provide an adequate burial fund for a mem- 
ber of his family, which the companies agree to pay almost at once. They 
have a paid-up capital, and an accumulated surplus, giving security to 
every one. How widely such companies differ from the loose co-operative 
companies, will be evident to the most casual observer. The Prudential 
complies with the law, makes a lawful contract, and engages to fulfill its 
contract according to law. It has capital to fall back upon, and voluntarily 
submits to all the conditions which the law imposes. On the other hand, 
the co-operative companies are a law unto themselves, and they submit to 
no other law. They have no legal contract to bind them ; and if they 
please to pay, they pay ; and if they do not please to pay, they keep the 
funds that have been committed to them. Any Prudential company is 
better than such rotten associations as these. Happy will it be for the 
States if the Prudential companies should drive the co-operative companies 
out of the country. 

How far the Industrial insurance companies succeeded in 
counteracting the evil of the increasing number of assessment 
insurance societies, it is as yet too difficult to state, for, not only 
are the statistics of fraternal insurance incomplete and largely 
misleading, but the subtle evil which underlies these institutions 
has become too widely disseminated to become easily eradicated. 
It may with perfect truth be stated of those who originated and 
promoted the thousands of so-called fraternal or mutual-benefit aid 
societies, as Dr. Hodgkin once said of certain English Friendly 
Societies in a little volume on " Health," published in 1841, 
that ' ' whilst none but an accomplished mathematician would 
think of producing an almanac in which astronomical predictions 
should be given, almost any set of men, who withdraw from the 
tap-room to the comparatively quiet parlour of an inn, seem to 
think themselves qualified, with the assistance of the landlord's 
arithmetic, to devise the plan of a Benefit Society." It is the 
plain truth that the majority of benefit societies or secret 
orders containing in their charters an insurance provision, or aim- 
ing at the transaction of an insurance business, have been founded 



13^ HISTORY OF THE PRUDENTIAL. 

by men ignorant of, or indifferent to, the principles of life insur- 
ance, the elements of finance and the law of human mortality on 
which the business is founded. 

However much Industrial insurance, as practiced by The 
Prudential, may have fallen short in meeting the needs and wants 
of the industrial population, it has at least accomplished one 
of the principal objects for which it was organized : it has paid 
the claims which have matured, and the companies will always be 
able to meet their obligations, founded, as they are, on scientific- 
ally constructed tables of mortality and finance. No Industrial 
insurance company in this country has ever failed and none is 
ever likely to fail, except on account of possible dishonesty, 
which must be taken into account in all financial operations ; 
but the companies can never fail on account of inherent weakness, 
false principles, or erroneous practice, in view of the soundness of 
the basis on which the business rests. 

I have previously pointed out that by November, 1879, the 
Metropolitan Life Insurance Company of New York had also com- 
menced the transaction of Industrial insurance. Contrary to the 
course followed by The Prudential, the Metropolitan imported a 
large number of superintendents, assistants and agents from 
England, and at once extended its operations over a large num- 
ber of the States, making possible the more rapid extension of 
the business, which gave the company a lead which it has main- 
tained up to the present time. The Metropolitan had for many 
years transacted an Ordinary business, had a large capital, a well- 
equipped office force and local offices in many parts of the country, 
enabling it, with the assistance of a large number of men expe- 
rienced in the Industrial business, to at once take the position of 
numerical leadership, which it has successfully maintained for 
the past twenty years. 

During the year 1880 The Prudential had continued to make 
considerable progress, and by December 31, 1880, there were 
87,462 policies in force for the sum of $7,347,892. Of this 
sum the larger proportion was confined to the State of New 
Jersey, the operations in New York and Pennsylvania being 
as yet very limited in extent. The results obtained were satis- 
factory to the Company, which even at this early date followed 
its maxim — to be satisfied with an improvement from year to 
year of its own previous record. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 133 



CHAPTER IX. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1881-1884. 

During the early stages of all commercial development, 
excessive and often unfair competition is inevitable. Men 
anxious to succeed in any given direction, partly ignorant of 
the means and largely ignorant of attainable results, will ever 
and again fall short, and give undue weight to factors and ele- 
ments of least importance, and but small attention to factors 
and elements of most importance. Nations, as well as individu- 
als and corporations, will enter into war with each other, which, 
but for a saving remnant of common sense, would often prove 
mutually destructive. With a field open to all, and with bound- 
less opportunities, men ana companies, during the early days of 
Industrial insurance, struggled more against each other than 
they struggled for the essential interests of each and all, Indus- 
trial insurance companies, no more than Ordinary insurance 
companies or fraternal societies, or business enterprises of any 
kind ; but it is something considerably to the credit of The 
Prudential that, from the first, it never concerned itself with 
the success or efforts of other companies, being satisfied to 
attain its own place in the business world in its own way. In 
the beginning it discouraged agents from methods of unfair 
competition, from making attacks on other companies and other 
methods of insurance, and to this policy it has remained faithful 
up to the present time. For a number of years, however, the 
Company was drawn into the vortex of a competitive struggle, 
which did not come to an end until about 1884. 

As an evidence of the increasing local approval of the 

Company and its methods, I quote the following extract from the 

Sunday Call of December 18, 1881 : — • 

To say anything in this city in praise of The Prudential Insurance 
Company, whose office is at No. 215 Market street, is like "carrying coals 
to Newcastle." 



134 HISTORY OF THE PRUDENTIAL. 

Everybody in Newark knows this company and knows its honorable 
record. It has paid so many claims here that it would probably be difficult 
to find a person in our industrial population who has not had come under 
his own personal observation the benefits derived from insuring in this 
company. Who is there in Newark who does not know of a relative or a 
friend whose necessities have not thus been relieved in that saddest of all 
hours, when the dark shadow of death enters the door? It is no wonder 
that the company has such a marvellous hold upon the confidence and 
good-will of our people. 

With more than 35,000 policies in force upon the lives of persons in 
Newark, who pay their premiums weekly to the agents of The Prudential 
with the regularity of clockwork, that company will continue to exercise 
a powerful influence over the social well-being of our people. Besides its 
fair record The Prudential has the prestige of being the first to introduce 
into this country the present and only plan of industrial insurance, which 
has proven a permanent success. In addition to this the company is 
sound, and is managed with tact, prudence, and in a spirit of fairness that 
makes the interests of its policy-holders safe. 

And, as further evidence of the increasing influence of the 

Company beyond the large cities of the State, I give an extract 

from the Metuchen Inquirer of October 20, 1881, as follows : — 

The plan of insurance offered by The Prudential Insurance Company 
places insurance within the reach of all, rich or poor. For years the poor 
man was shut out completely from the benefits of life insurance. The 
establishment of The Prudential Insurance Company, of Newark, N. J., 
arose entirely from the necessity of giving the poor man some 7neans of 
providing for those from whom death would separate him, and at a slight 
cost, payable in instalments, so arranged as to fall due weekly, and at a 
rate which brings the desired benefits within the reach of all, no matter 
how poor the man may be, who wishes to make such provision for the 
future. The company, by always paying the claims brought against it, has 
won the entire confidence of the public. No man can hesitate a moment 
to secure the means of providing a decent burial for himself or of a member 
of his family, or of leaving behind him means of supporting his dear ones, 
at so trifling a cost. Men, women and children, even infants of one year 
of age, can be insured in this model organization, and the weekly payments 
required are so small that any one can afford to pay them. Thousands 
take this means of securing themselves from receiving a pauper funeral. 

It, however, was not only from the local press that Industrial 

insurance received unqualified endorsement. Among others, the 

Superintendent of Insurance of the State of New York referred 

to the subject in his annual report for 1881 in the following 

manner : — 

This class of insurance is somewhat new, and is yet an experiment in 
this country, but thus far it seems to meet with success which promises 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 135 

well for its future growth and prosperity. Its scope and plan involve 
insurance on the lives of laboring men and their families for small sums 
ranging from a few dollars upwards, and the payment of premiums in 
weekly sums of a few cents. Success in this branch of business is only 
attainable by the issuance of a vast number of policies and their diffusion 
in the large cities among the masses of people. One company in New 
York, the Metropolitan, has issued, during the past year, more than two 
hundred thousand of these policies. As the ability of the class of people 
who take these policies depends entirely upon their steady employment, 
and upon their habits of prudence and economy, there are, naturally, 
numerous lapses, a number for which the average of the ordinary business 
is no proper criterion. The companies which appear to be successfully 
prosecuting this class of business have uniformly afforded every facility 
possible to enable the lapsed policies to be renewed again upon just and 
equitable terms, and, so far, there have been no complaints of policy- 
holders in that direction. But such companies may not always be in the 
hands of men who will be governed by these honorable principles, and the 
protection to which their policy-holders are equitably entitled should be 
made a matter of legal regulation. The law under which these companies 
act is the general life insurance law of the State. While this law does not 
prohibit the issuance of such policies, or the payment of premiums in these 
weekly sums, it is not believed that such a system was contemplated when 
the law was passed. It seems, therefore, that some provision should be 
adopted prescribing more particular regulations and requirements to this 
class of business. 

The superintendent seems to have fully recognized the merits 
of the business, while at the same time conscious of technical diffi- 
culties, one of which, the question of reserves, has been previously 
dealt with. On the question of lapses he pointed out that forfeit- 
ures in Industrial insurance could not be compared with forfeit- 
ures in Ordinary insurance, for, as a moment's consideration will 
show, the policy-holder in an Ordinary company has, at the most, 
four chances to lapse his policy during the year, while the Indus- 
trial policy-holder has fifty-two chances to cancel his policy for 
some cause or other, and, again, while the policy-holder in an 
Ordinary company has usually paid at least one quarter's premium 
of some material consequence, the Industrial policy-holder 
will, in most cases, have paid nothing at all, or but a few dimes, 
for which he will have received from six to eight weeks of 
insurance protection. There was, however, no need for special 
legislation on the subject, for, as was well said by the Weekly 
Underwriter, "It does not follow, as a political axiom, that 
because a particular business has not been legislated upon, there- 
fore legislation is needed. There are a great many enterprises 



136 HISTORY OF THE PRUDENTIAL. 

that succeed very well without special legislation, and Industrial 
insurance is fully as likely to succeed without legislation as 
with it." 

On one point, however, considerable difficulty was experi- 
enced on the part of The Prudential in entering the State of 
New York. It would seem that the authority of the Company to 
do business in the State of New York had not been renewed for 
1 88 1, and that the Company had made no application for a license 
that year. In the Spectator for April, 1881, however, there is an 
article which would indicate the difficulty, in that it was purely a 
question of license fee which The Prudential's New York repre- 
sentative ought to pay. In the words of the Spectator : — 

The laws of New York and New Jersey are reciprocal in effect. Indus- 
trial insurance is especially peculiar in the numerous solicitors required to 
conduct it successfully, each agent, as compared with Ordinary life-insur- 
ance representatives, handling a very small amount of money. And here 
is where the difficulty arose when the Company first entered the State. 
The Insurance Department at length determined, under recommendation 
of the Attorney-General, to construe Industrial superintendents and assist- 
ant superintendents of The Prudential in New York as corresponding with 
Ordinary life-insurance agents, and under the New Jersey law charged 
them $22 each for the State license fee. The New Jersey Legislature, at 
its last session, amended the license law by providing that agents and 
solicitors of Industrial companies should be taxed $2 each. Of course, 
this had a corresponding effect upon The Prudential's licenses in New York. 
But the New York Department goes further, and disregarding its previous 
decision, claims that $22 should be paid by each of the Company's solicitors 
for last year. The Prudential, of course, feels aggrieved, and is looking 
towards a more equitable arrangement that shall recognize a difference be- 
tween its small army of solicitors and its superintendents of districts. 
The latter it is willing to pay for at the rate of $22 each, but to pay that 
sum for each solicitor would be a high price to pay for the privilege of 
doing business in the State. The Company has a large and growing busi- 
ness in New York, and will doubtless renew its power to continue business 
in any event. 

The point involved was a most serious one, since excessive 
license fees would very largely increase the expense-rate of the 
Company. The matter however was equitably adjusted and the 
Company resumed business. 

From the very beginning, as I have had more than one occa- 
sion to point out, the managers of The Prudential had given 
thoughtful consideration to the large number of technical ques- 
tions and problems which were constantly pressing for solution. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 137 

Reference has been made to the question of reserves, to the ques- 
tion of immediate benefit, to the insurance of children, to the 
surrender value of policies, etc., but during the early part of 1881 
a new problem presented itself, which the Company dealt with, as 
in all other matters, solely on the basis of facts as they were avail- 
able for the purpose of aiding the Company in arriving at an equit- 
able decision. Thus far negroes had not been seriously considered 
as applicants for Industrial insurance, but with the increasing 
extent of the business the colored population had also become 
considerably interested in the subject, and was now in increasing 
numbers availing itself of this opportunity to provide for the 
contingencies of life. Careful investigations, including the 
Company's own experience, and data collected for a large num- 
ber of American cities, pointed to an excessive mortality among 
this element of the population, so much so that it became 
apparent that unless the Company adopted a restrictive course 
it would soon find itself in difiiculties because of inordinate 
losses experienced on this class of policy-holders. Under date 
of March 10th, therefore, the Company issued a circular to 
superintendents and agents on the subject of colored risks, of 
which the following is a copy : — 

Newark, N. J., March 10, 1881. 

To Superintendents and Agents. 

The following changes will be made with respect to colored persons 
(Negroes), applying for assurance in this Company, under policies issued 
on and after the week commencing Monday, March 28, 1881. (This 
applies to all Applications taken during the week commencing Monday, 
March 21st.) 

1. Under Adult Policies the sum assured will be One-Third less than 
now granted for the same weekly premium. 

2. Under Infantile Policies the amount assured will be the same as 
now, but the weekly premium will be increased to Five Cents. 

These cha?iges are made in consequence of the excessive mortality pre- 
vailing in the class above named ; they do not apply to other persons. 
Policies issued prior to March 28th will not be affected by this regulation. 

Rate tables for use with Colored Applicants will be duly sent you. 

Agents using Infantile Applications in which the question of " Race" 
is not asked, should write on the lower margin on the back of the applica- 
tion the word "white" or "colored" as the case may be — unless this is 
done the application will be returned for correction. 

John F. Dryden, 

Secretary. 



138 



HISTORY OF THE PRUDENTIAL. 



The following is an abbreviated copy of the first rate table 
used for colored adult applications : — 

ADULT RATE TABLE FOR COLORED RISKS. 
First used Aprii, 4, 1881. 

weekly premiums. 









Twenty- Five 




Ages. 


Five Cents. 


Ten Cents. 


Cents. 


Fifty Cents. 


13 


$78 00 








15 


76 00 








20 


68 00 


$136 00 






25 


60 00 


120 00 


$300 OO 




30 


52 00 


104 00 


260 00 




35 


45 00 


90 00 


225 OO 




40 


37 00 


74 00 


185 OO 




45 


30 00 


60 00 


150 OO 


$300 OO 


50 


24 00 


48 00 


120 OO 


240 OO 


55 


19 00 


38 00 


95 co 


190 OO 


60 




30 00 


75 00 


150 OO 


65 




22 OO 


55 00 




70 






40 OO 





This action on the part of The Prudential was fully justified 
by the available statistical information on the subject. Reference 
to any health report of a Southern or Northern city covering the 
years 1 880-1 881 will clearly prove that the generaj death-rate of 
the colored population was about 50 per cent, in excess of the 
death-rate of the white population. 

Thus, for instance, according to the health report for Savan- 
nah, Ga., the average annual death-rate of the white population 
was 38.6 per 1,000, while for the colored population the rate was 
51.7 per 1,000. For New Orleans the white rate had been 31.3 
per 1,000, against the colored rate of 40.2 per 1,000. For Mobile 
the white rate had been 24.6 per 1,000, against the colored rate of 
39.7 per 1,000, and this difference in the mortality rate of the two 
races held true for all the other cities for which information was 
available. In view of these facts, taken in connection with the 
actual experience of the Company, the action of The Prudential 
was not only justified, but necessary for its own safety and in 
equity to the white policy-holders, who as a class are subject to a 
mortality less than two-thirds as high as the rate prevailing among 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 1 39 

the colored population. The position assumed was, therefore, 
justified by the available facts, and the Company has not receded 
from this course, although, under laws since passed, life-insurance 
companies are now compelled in most of the States to grant equal 
benefits for the same premiums to both races, in defiance of the 
laws of mortality and ordinary business conduct. Since that date 
a large amount of information on the subject of negro mortality 
has been collected, but no subsequent investigation has proven 
that the Company's position in the matter was erroneous or 
unjustified or overcautious, and, while the Company at the 
present time accepts applications from negroes and issues policies 
without rating, it does not solicit this class of risks, and has, 
therefore, comparatively few colored persons as policy-holders 
on its books.* 

The question of expenses in conducting the business of 
Industrial insurance received due consideration, especially in the 
insurance journals of the period, largely in consequence of a 
suit of the British Prudential against the Western Provident, 
referred to at considerable length in the Insurance Monitor under 
date of September, 1881. During the trial of the case some very 
interesting evidence relative to the Industrial expense-rate was 
brought out in the examination of Mr. Arthur H. Bailey, the well- 
known actuary, who testified that the lapsed policies were a serious 
Jina?icial loss to the Industrial companies, the more so in view of the 
fact that, since " profit which the companies might have expected 
to make from the premiums payable in succeeding years would, 
of course, be lost in case of the lapse of the policy." In further 
explanation of this interesting point in life-insurance practice, I 
quote from the Spectator of September 1, 1881, a contribution 
evidently from the pen of Mr. Dryden : — 

There has, at one time or another, been a great deal of nonsense said 
about The Prudential and its system of insurance, by those who do not 
understand it. Nobody can suppose that a policy for $50, upon which pre- 
miums have to be collected at the member's house fifty-two times a year, 
can be taken care of at as low a rate of expense as a policy for |5,ooo, upon 
which the premium is payable but once annually, and that in advance. In 



* For a full discussion of the entire subject of negro mortality, see the 
writer's work on "The Race Traits and Tendencies of the American Negro,'* 
Macmillan & Co., New York, 1896. 



140 HISTORY OF THE PRUDENTIAL. 

every branch of business the small buyer pays higher for his goods than the 
large one. It is an inevitable result of the laws of trade and commerce. 
Nevertheless, the poor man must buy in small quantities or he can not buy 
at all. The question is, Shall he be enabled to buy in such quantities as 
his limited means permit? Some years since, Henry Harben, the then 
Secretary of the [British] Prudential, read a paper upon his company 
before the Institute of Actuaries. At its close this very phase of the 
company's business came up. Such eminent actuaries as Messrs. Brown, 
Bailey, Walford, Sprague and others participated in the discussion, and 
there seemed to be no dissent from the views uttered by some of them, 
that the expense was entirely proper, was inseparable from the business, 
and that if the laboring man wanted exceptional privileges he must expect 
to pay for them. This is the true and sensible view to be taken of this 
matter. 

The suggestion of The Indicator, that insurance should be established 
and carried on by the co-operation of employers, has been again and again 
tried and proved a failure. No success can be obtained except through the 
aid of a well-organized and systematized agency department. The men 
employed for this work must be paid. Some years ago The Prudential 
made the experiment, in one of our large districts, of offering a rebate to 
those of its members who would go to the office and pay their premiums. 
The experiment was a failure and had to be abandoned. The effort of the 
government to introduce insurance among the working classes in England 
utterly failed. Managers of a company like The Prudential have every 
inducement to keep the expenses down to the lowest point possible, and 
we think it fair to assume they do so. We believe the Prudential has been 
an inestimable blessing to the workingmen of England, and that the com- 
panies engaged in the same line of business here will prove of like advan- 
tage to our people. 

J. F. D. 

The position taken by Mr. Dryden may be summed up in 
the statement that ' ' the expense was entirely proper and insepa- 
rable from the business, ' ' in view of the fact that the premiums 
had to be collected from the house of the insured, that the neces- 
sary supervision and auditing of amounts required a much larger 
amount of clerical labor, and that the general methods of con- 
ducting the business differed widely from the methods prevailing 
in Ordinary insurance, where each transaction required less labor 
and was subject to less expense than was the case in Industrial 
insurance. 

However much may be said on the question of expense, it is 
one which has never hindered the development of the business, it 
is one which has been subject to considerable modification, and 
which will undoubtedly be materially improved upon in the course 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 141 

of the years, as the business becomes older and the agency staff 
becomes more permanent. 

It must be plain to any one familiar with the history of 
industrial progress, that a new business experiment like Indus- 
trial insurance was not likely to escape bitter antagonism and 
some decided opposition. Naturally, dissatisfied policy-holders 
and especially dissatisfied agents, as well as others opposed to the 
extension of Industrial insurance principles, were only too ready 
to supply newspapers with information or expressions of opinion 
adverse to the business, and among the first to give space to an 
open attack, with special reference to the lapse and expense-rates, 
was the Philadelphia Sunday Times, which, under date of June 
26, 1 88 1, contained a lengthy discussion of some phases of Indus- 
trial insurance, which were ably answered in an article in the 
Weekly Underwriter of September 17, 1881, as follows: — 

Whether or not so-called "Industrial" insurance will secure a per- 
manent foothold in the United States we regard as not yet settled, but we 
should be very sorry if, through the intemperate advocacy of its friends, 
or the ignorant assaults of its opponents, it failed to have its chance of 
success. We have contented ourselves with noting its progress, from time 
to time, with not sufficient knowledge of its internal workings to venture 
to pronounce a verdict upon it. But there are others, with even less 
knowledge than we possess, who are not so reticent. One of our daily 
exchanges has condemned it for its expenses, and the companies practicing 
it for the gains made from lapses — or, in other words, for the sums taken 
from poor people, who get only a few weeks or months of temporary insur- 
ance for their money. The mistake must not be made of measuring the 
business in these two respects by the conditions which attach to ordinary 
life insurance. Industrial premiums are very properly loaded much 
heavier, and a business of thirty per cent, loading is no criterion for one 
of one hundred per cent. Nor are the lapses of a business among merchants, 
lawyers, ministers, etc., a proper standard for lapses among working 
people subject to every rise and fall of trade and everything affecting day 
wages. As a matter of fact, the lapses in this business are far more likely 
to ruin the companies than the assured, and the enormous expenses are 
inseparable from a business which consists of house-to-house collection of 
nickels, and which is being rapidly extended. Our own fear has been, not 
that the poor people who pay the nickels would suffer, but that the com- 
panies engaged in an endeavor to collect them would endanger their 
capital. Every policy that lapses must be a loss to the company, and with 
an industrial class as shifting as is our own there must be many lapses. 
The problem for the underwriter who will be successful in industrial insur- 
ance is, it seems to us, to secure persistence in paying by the assured. That 
done, the way is easy. But a company only retaining at the close of the 



142 HISTORY OF THE PRUDENTIAL. 

year a little more than one-half of the business of the year, can not be said 
to have solved it. Yet the Prudential of London, with eight millions of 
annual income, ample accumulations and a sufficient surplus, represents, 
in its five millions of present members, but one policy-holder retained for 
every three that have lapsed. Either the machinery is defective or there 
may be, in the nature of the people or their business, something which 
will necessitate still larger premiums than are now charged. If the trouble 
is in the machinery, the managers now in charge of the business will 
remedy it without unnecessary delay ; if it is in the people, they will 
probably sacrifice some capital before it is remedied. At any rate, we 
believe in giving them a fair chance to work out their problem, undeterred 
by fulsome flattery or ignorant criticism. The result is worth attaining, 
and we have no doubt the means to attain it will be found. 

There is in this article the same clear conception of the busi- 
ness as brought out in Mr. Dryden's letter on the same subject 
in the Spectator of September ist. I have given space to these 
expressions of opinion on the part of qualified writers so as to 
bring out as clearly as possible the views of the companies 
engaged in the business. On the question of lapses the last word 
has not as yet been said, and, in fact, few arguments worthy of 
the name have found their way into public prints outside of the 
insurance publications. A moment's reflection will make it clear 
that many of the millions of so-called insurance represent only a 
bookkeeper's statement of business on which little or nothing had 
been paid, and, rather than being a gain to the company, indicate 
a serious loss and a material hindrance to the largest possible 
development of Industrial insurance. 

By December 31, 1881, The Prudential had increased its 
business to 133,582 policies for the aggregate sum of $10,959,948. 
The four companies now transacting the business had, in the 
aggregate, 367,473 policies in force. One company, the Provident 
Savings, discontinued the writing of new Industrial business 
during the year, and no longer makes returns in its annual 
reports of the Industrial business in force. Of the total business 
of The Prudential 56.5 per cent, was in force in the State of New 
Jersey, 24.0 per cent, in the State of New York, while 19.5 per 
cent, was in force in other States, largely in Pennsylvania. 

Referring to the extension of the business of The Prudential 
to the city of Paterson, the Paterson Press of April 22, 1882, 
expressed itself emphatically on the subject of Industrial insur- 
ance, and concluded an article of a column and a half as follows : 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 143 

1 ' We strongly recommend recourse to this excellent system of 
insurance by every person of moderate means, for with such a 
plan there is really no excuse for any person not maintaining his 
independence ; providing out of his own resources for a proper 
interment at death, for the payment of debts he may owe, for 
leaving to his survivors something to take the place at least 
temporarily of a productive life, for defraying those expenses 
which attend sickness and death of any member of the family — 
expenses which, at one time or another, are absolutely certain to 
come to all." In the words of the Trenton True American, 
' ' The press in all the principal cities of this country ' ' were 
" emphatic in their commendation of the plan." 

Among other elements of the population the Germans had, 
from the beginning, been extensive patrons of Industrial insur- 
ance ; naturally of a thrifty disposition, they had readily availed 
themselves of this form of providing for contingencies, and, in 
response to a distinct demand, The Prudential, as far back as 1876, 
had issued special explanations in German, and supplied its 
agents with applications in the German language, tending to 
make the aims and objects of Industrial insurance more easily 
understood. Hence the attitude of the German press, in a manner 
most critical of all social institutions and forms of saving and 
investment of non-German origin, seems of sufficient interest to 
warrant a quotation from the Carlstadt Freie Presse, under date 
of July 1, 1882, in a free translation as follows : — 

We have an overabundance of all sorts of sick-relief and aid associa- 
tions, but neither one form nor another offers that degree of absolute 
security which is necessary for the working population in case of need. 
The confidence of the public in these forms of co-operative or fraternal 
associations, in consequence of the bitter experience in our own village, 
has been so shaken and disturbed that we welcome the work of a company 
like The Prudential, which does away with the most serious objections 
made against the former type of burial or sickness associations. 

Naturally, such emphatic approval as this, founded on sub- 
stantial reasons, must needs have done much to influence the 
German population in becoming, in increasing numbers, the 
patrons of the Industrial system of The Prudential, and at the 
present time the Germans stand third in rank of nationalities 
which patronize the Industrial business of The Prudential. 



144 HISTORY OF THE PRUDENTIAL. 

That public approval was not confined to the secular press is 
illustrated by the following extract from Our Church Paper, 
devoted to Christian interests as viewed by the Congregation alists 
of Newark, in its issue for April, 1882 : — 

The Prudential Insurance Company, of this city, has had a history in 
some respects phenomenal. The Company is only six years old, yet it has 
issued over 300,000 policies and paid more than 4,000 death claims. It 
issues burial-fund policies upon the weekly-premium plan, the premiums 
being collected weekly by agents, at the residences of the assured. This 
institution is not organized as a benevolent society, but it would be hard to 
find an association doing a ivork of greater good. 

And in the same publication, under date of May, 1882, oc- 
curred a further endorsement of the plan of The Prudential, 
which also seems worthy of a place in this summary of public 
opinion on the work of The Prudential at this early period of its 
history : — 

If ever a company was started which deserved the sympathy and co- 
operation especially of the working classes, it is The Prudential. Almost 
alone, with a reasonable prospect of success, has it undertaken the solution 
of the great insurance problem of the day, how to provide a life-insurance 
company for those of moderate means which shall be deserving of the 
name. In the face of obstacles of no ordinary character, it has made 
astounding progress and secured a magnificent clientage. 

The concensus of public opinion was, however, most clearly 
expressed in a quotation in the Newark Register of January, 1882, 
namely, that ' ' The Prude?itial Insurance Company, of Newark, 
is emphatically the poor maji' s best and most reliable friend '." 

New problems and questions of practice were constantly 
arising which demanded the most careful consideration. The 
business was new, and much was expected of it which was not 
warranted by the plain policy contract between the insured and 
the companies. The notion still remained with many that life 
insurance was more of a charity than a business, and many 
writers on the subject of insurance still speak of it as a benevo- 
lence, when it is purely a matter of contract and of business. 
Fortunately, as I have had occasion to point out more than once, 
Mr. Dryden had early recognized the practical difficulties and dealt 
with them in a manner satisfactory to the policy-holders. Mr. 
Noah F. Blanchard, who had been President of The Prudential 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 145 

from May, 1879, died on May 11, 1881, and on the 23rd of the 
same month Mr. Dryden was elected President of the Company. 
In reference to Mr. Dryden 's election, the Spectator of June 2, 1881, 
properly said that ' ' If the growth of The Prudential is due in any 
important part to the individual efforts of one man, that man is 
John F. Dryden, and the Board of Directors pays him a deserved 
compliment in giving him the Presidency." Of Mr. Blanchard 
the Spectator of May, 1881, stated that " Throughout his life he 
had been a man of great activity and excellent health, identified 
with The Prudential from its inception and always manifesting a 
lively interest in its progress. His management of The Prudential 
with Secretary John F. Dryden was a great success, during his 
administration the Company having achieved in large part the 
good reputation it now bears. ' ' 

During the early part of 1882 The Prudential had been made 
the object of an attack in the newspapers on account of the sale 
of stock by a number of the stockholders, who, no doubt, were 
dissatisfied with the small returns which had thus far been real- 
ized. Certain unscrupulous parties, endeavoring to injure the 
reputation of the Company, had caused sensational reports to be 
circulated in the newspapers, and I can not do better than quote 
an article on the subject from the January number of the Spectator 
for 1882, which fairly explains itself : — 

On Saturday morning, the 31st ultimo, an article appeared in the New 
York Star y in which an attempt was made to throw discredit upon The 
Prudential, of Newark, by making it appear that a number of stockholders 
and directors were dissatisfied with the management of the Company, and 
had for that reason sold their stock. On the evening previous an attempt 
was made to smuggle the same article into all the New York dailies, but 
none except the Star noticed it. The Star at once had the subject investi- 
gated, and in its next issue did all it could to repair the injury by contra- 
dicting the whole substance of the previous article. The animus of this 
disgraceful trick is obvious, and taken in connection with the fact that, 
starting less than six years ago, the Company has built up a business upon 
which the annual premium income is more than $400,000 — the largest of 
any company in New Jersey, except the Mutual Benefit Life — its utter 
senselessness is manifest. We have heretofore spoken in strong terms of 
such methods by rival companies and their agents. Allan Bassett, who is 
prominently referred to in the article in question as the former president, 
was forced to resign that position by the Board of Directors, in May, 1879. 
For a time thereafter he was the agent of the New York Life, at Newark, 
but quite recently resigned to become the agent of a competing company 
in the special feature of industrial insurance there. He signalized this 



146 HISTORY OF THE PRUDENTIAL. 

change by publishing a card in which an attempt was made to make it 
appear that he had just resigned the presidency of The Prudential to be- 
come an agent for an older and stronger company. This attempt utterly 
failed, and the present exploit is only another attempt in the same direc- 
tion, equally silly. 

The Prudential is a vigorous, sound, ably-managed company, justly 
entitled to the fullest confidence of the public, and that the sales of stock 
arose from no doubt of this is clearly shown by the following certificate of 
the gentlemen who sold a part or the whole of their stock : — 

Newark, N. J., January 3, 1882. 
The undersigned, having recently sold stock of The Prudential Insurance 
Company, hereby certify that such sales were entirely business transactions, 
and should not be construed as evidence of our lack of confidence in the 
solvency of the Company. We believe the Company is sound and worthy 
of the confidence of the public. 

T. B. Mandeviu,e, Wiujam H. Murphy, 

940 Broad Street ; FRANKUN MURPHY, 

Benjamin Atha, Wiujam Whitty, 

James G. Barnet, E. A. Wilkinson. 

Continuing, the Spectator said : — 

The Prudential is doing a splendid work. It was the first company to 
bring the benefits of life insurance within the reach of our working classes 
upon the English plan of weekly payments made directly to the company. 
There had been other attempts to do something in this direction through 
the cumbrous and objectionable machinery of the " Hildise Bund " or other 
societies, through which policies were issued to the members upon quar- 
terly payments, but they utterly failed, and it remained for The Prudential 
to solve the problem of insurance for the working poor, which it has done 
with astonishing success, and all attempts to throw discredit upon it or 
its management deserve the contempt of all right-thinking men. The 
field is large enough for all, and therefore any competing company, if 
self-respecting, should refrain from assaults which can not injure The 
Prudential as much as they hinder the growth of the business in the estima- 
tion of the public. 

The year 1882 had been full of new problems, and the strug- 
gle for success had been intensified by a most unfortunate devel- 
opment of an unfair competition and inter-company warfare. 
The business of the Company had increased to 196,007 policies in 
force for an aggregate sum of $15,738,973, and the corresponding 
growth of other Industrial companies had been such that the 
total number of Industrial policies in force in the United States 




HOME OFFICE OF 

THE) PRUDENTIAL INSURANCE) COMPANY OF AMERICA, 

1883-1892. 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 147 

now exceeded half a million, being 587,875 policies for $56,374,710 
of insurance. 

Public approval of the new form of insurance continued, and 
from many sources there is evidence of an increasing respect for, 
and kindly interest in, the work of The Prudential. Among 
others, the Insurance and Commercial Magazine, in its issue of 
December 31, 1883, referred to the subject of Industrial insurance 
in the following language : — 

Of all things poor people desire to avoid, is a " charity " burial of one 
of their children. 

By Industrial Life Insurance, as one of the Commissioners of Insur- 
ance truly said, children are insured for a premium of five cents a week, 
for an amount that provides a fair burial fund, payable immediately after 
death is reported, when of all times most needed. 

At this time, when the usual small weekly income is interrupted or 
used up for medical expenses, the little insurance money comes in as a 
sort of God-sent blessing to the poor, stricken family. 

The amount to be realized, forty or fifty dollars, is too small to tempt 
infanticide or criminal practice, and never has, even in England, where so 
extensively practiced ; and the little weekly premiums are not missed from 
the small weekly income. 

The tendency of Industrial insurance is only good, and in England, 
where so extensively practiced for the last thirty years, commands the 
uniform praise of the press, the pulpit, and the informed public. 

We understand there are over seven million families interested in it 
in England, and we see no reason why a like number should not become 
directly connected with it in this country. 

The growth of the Company had been such that during the 
year it became necessary to once more remove the offices, and on 
April 1, 1883, the home office was removed to the Jube Building, 
878-880 Broad street, Newark. This building was occupied by 
the Company for a number of years, when increasing growth and 
development made another and still more important removal 
necessary, to which reference will be made further on. 

The effect of the business, which was now sufficiently well 
established, made itself felt in other directions, and public atten- 
tion was drawn to the matter in an article in the Newark Daily 
Journal, January 19, 1883, i* 1 which it was stated that "The 
beneficial effects of this system of insurance are well known. 
Since The Prudential has been in operation the proportionate 
number of burials at the expense of the city has been very ma- 
terially lessened, and the Overseer of the Poor and undertakers 



148 HISTORY OF THE PRUDENTIAL. 

will testify to this. People who before had no means to bury 
their dead now find it in the comfortable sums provided by their 
small weekly payments as premiums on policies in The Prudential. 
A policy in The Prudential is an absolute safeguard against a pau- 
per' s burial ', and the amount obtained often bridges over for a 
considerable period the chasm of necessity caused by the death of 
any member of the family. ' ' 

This emphatic statement of the direct relation of Industrial 
insurance to public welfare was further supported by the pub- 
lished returns of pauper funerals and general pauperism in the 
city of Newark, which indicated a very material reduction in both 
items of public expenditure since the introduction of the system 
of family insurance. 

Additional proof of the value of Industrial insurance as a 
method of teaching the habits of thrift in other directions is 
found in the statement of an Industrial agent in The Chronicle, 
a New York insurance publication, under date of November 15, 
1883 : "I soon found that my premium increase would be small 
unless I was able to teach the poor people thrift, and I often had 
to instruct them in the matter of saving the pence until I called, 
in order to keep the policy in force, and also to teach the better- 
to-do classes how to secure the benefits offered them for their 
small weekly pence. ' ' ' 

This view of the mission of the Industrial agent pre- 
vails extensively among the industrial population. It is not 
too much to say that the Prudential agent is, in the majority 
of instances, the true friend of those with whom he comes in 
contact. Few men more thoroughly learn to understand the 
ways and means of the wage-earning population, and few have 
better opportunities to extend the teachings of the gospel of 
thrift to those who need it most for the improvement of their 
social and economic conditions. Teaching the people thrift in one 
direction has been accepted, by many who have studied the 
subject, as equivalent to the teaching of thrift habits in other direc- 
tions, and those who, through the Prudential agent, receive their 
first instruction and encouragement in the direction of systematic 
saving must needs, in the course of the years, become better citi- 
zens, better producers and better off in material good things in 
consequence of their relationship to an Industrial insurance com- 
pany. 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 149 

As a rule, exceptional caution had been used in selecting 
men for the position of Industrial agents. Security for the 
faithful discharge of their duties was required, and inquiry was 
invariably made of applicants for positions as to past records 
in former employments. Still, it is perfectly natural that occa- 
sionally, or even frequently, unworthy men would succeed in 
securing positions which, for self-evident reasons, offered many 
opportunities for dishonesty and fraud. The Prudential had 
always dealt severely with men of this class, and had never hesi- 
tated to institute criminal prosecution for larceny or fraud. The 
handling of small sums of money incident to the conduct of the 
business was naturally an exceedingly difficult matter to manage, 
and Industrial insurance companies had found it necessary to 
make examples of agents detected in obtaining fraudulent com- 
missions or appropriating premiums to their own use. Once 
discharged, such agents would often connect themselves with 
other insurance organizations, usually bogus sick-benefit societies 
or so-called insurance associations. In other instances they would 
become connected with newspapers as reporters, and furnish all 
sorts of sensational matter founded on isolated instances, or on 
pure imagination. One of the methods was to send anony- 
mous communications to newspapers, containing charges against 
the companies, among others the intimation that children 
were insured for the purpose of realizing improperly at their 
death. 

The Pittsburg Dispatch of April 11, 1883, contained reference 
to such a letter, but in explanation the paper stated that, ' ' For the 
information of the author of the letter referred to, it may be said 
that the companies thus engaged are recognized in the commercial 
and insurance world as both substantial and legitimate, and such 
men as ex-Postmaster-General James and others are interested 
in them. They issue no policies on lives of infants under one 
year of age. The highest policy issued on children under six is 
$60, and under eleven $123." 

The subject of life insurance for children had by this time 
attracted attention in other parts of the country, and, among 
others, General Butler, in an address made at Spencer, Mass., 
during the latter part of 1883, as candidate for the Governorship 
of the State, made a bitter attack on Industrial insurance and 
many other forms of life insurance. The subject was discussed 



150 HISTORY OF THE PRUDENTIAL. 

in an article in the Weekly Underwriter* in which the errors 
of Governor Butler were set forth, making clear his absolute 
ignorance of the business and his self-evident perversion of the 
facts, the article concluding with the statement that * ' If he had 
made the speech in Boston a large number of his hearers could 
have told him that companies do not charge twenty-five cents 
a week for infantile insurance, and that they do not take a 
premium above five cents a week, and do not insure children for 
any larger sums than $100. They give no insurance at all for 
three months after the issue of the policy, and for the balance 
of the year from $10 to $14 in case of death. It may be that 
there are among Mr. Butler's constituents men who would 
murder a baby one year old for $10, but we do not believe it ; 
and so far from its being a fact that fathers in England have over 
and over again murdered their children, there has never been an 
authenticated case of the kind. ' ' 

The views of the Governor were also further referred to in 
the Standard of November 3, 1883, a Boston insurance publica- 
tion, the article concluding with the statement that "Governor 
Butler is lawyer enough to know that assertion is a good way from 
truth, and that impressions can never be substituted for facts. 
It is charitable to believe that he has gotten the impression in 
some way that this thing is done in England, but it would be 
well, before he makes such bold statements to the citizens of 
Massachusetts, for him to find one well-authenticated case of such 
a murder. ' ' 

The unfortunate aspect of the affair was the newspaper 
notoriety given to the business, and the influence such remarks 
naturally had on public opinion, especially among a class of people 
utterly unfamiliar with the practice of Industrial insurance, and 
on account of their wealth and social position, ignorant of the 
actual manners and morals of the industrial population. It has 
remained so to the present time, and the opposition to the business 
is to be found among the rich and well-to-do, or those otherwise 
out of touch with the working people ; and while millions of 
Industrial policies on children's lives are held to-day by 
working people and others, this fact has never had the slightest 
influence on the opinion of those who are opposed to this form of 

* Vol. 29, p. 229. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1881-84. 151 

insurance.* As has previously been stated, from the very begin- 
ning The Prudential had carefully observed its experience on 
infantile lives, and no case of even abuse or indifference had come 
to the notice of the Company, to say nothing of an authentic case 
of the murder of a child for insurance money ; nor is there such 
a case on record to this day, although millions of children have 
been insured for many years in the United States. 

Industrial insurance had continued to make considerable prog- 
ress during the year, and by December 31, 1883, The Prudential 
had 273,917 Industrial policies in force, for the sum of $23,053,935 
of insurance protection. The aggregate number of Industrial pol- 
icies in the United States now exceeded 877,000, while the total 
amount of Industrial insurance in force was almost $88,000,000. 
The business could now be considered completely established, 
and the question of ultimate success was now no longer open to 
a doubt. 

The subject was referred to in the New York "Insurance 
Report for 1884," as follows : — 

The rapid growth of industrial insurance indicates that the advantages 
it offers are being presented with characteristic energy by the companies 
that are making it a specialty. The subject presents for serious considera- 
tion several phases that are important, both in the protection afforded the 
policy-holders and the probable result of the efforts to establish the success 
of the undertaking. The reserve to be charged has been the subject of 
discussion by actuaries and at several conventions of State Insurance 
officials. A plan was agreed upon, and has been observed with but slight 
modification for the past three years. It is admitted that the large number 
of lapses and the great expense of obtaining and retaining the business 
are elements that do not enter into Ordinary life insurance transactions. 
In fact there is no precedent to guide the companies. The operations of 
the Prudential, of London, are familiar, it is true, yet the State control 

* This also holds largely true of charitable and reformatory or correc- 
tional societies, of which it has well been said, in a report on The 
Unemployed in Massachusetts, that "The ordinary charitable institution 
as now constituted is not in touch with the industrial conditions. Such 
societies are organized for the relief of pauperism. They are so well 
accustomed to deal with the degraded or particularly unfortunate class 
that they necessarily lose a certain sort of tact and generous discrimination 
which is needed in dealing with men and women who, under ordinary 
conditions, are steady wage-earners." 

(Final report on the Unemployed. House Document No. 50, p. xiv. 
Boston, 1895.) 



152 HISTORY OF THE PRUDENTIAL. 

surrounding the American companies restrains them to certain methods 
that are diametrically the opposite of the freedom and judgment that have 
permitted and fostered the great success of the foreign company. It may 
be assumed, therefore, that the superintendent will use the widest latitude 
of discretion consistent with safety in building tip and encouraging this 
plan for family insurance. It is a work of supererogation to refer in detail 
to the benefits conferred by the London company on the industrial classes 
of Great Britain, where its policy-holders number one-seventh of the popu- 
lation ; there is equal promise of benefit and success in the United States. 
The time for experimenting, it is true, has not passed, and there must be 
to some extent a different procedure in securing business compared with 
the operations in London. It is evident, however, that many points have 
been obtained by our companies from the foreign office, and supplemented 
successfully by the intuitiveness that discerns the faults and creates their 
remedies. The companies prosecuting the business in this State have in 
five years procured a membership equal to that of the [British] Prudential 
when it had twenty-eight years' experience. What can be prophesied of 
their future? The details connected with the collection of the weekly 
premiums and the verification of the work of the collectors are provided for 
and guided by a well-nigh perfect system. The increase each year in the 
number of people employed by the companies in their outside work indi- 
cates the popularity of the business. There is not recalled a single com- 
plaint made of any of the companies during the year, and, with a constitu- 
ency in this State that is quite formidable and growing daily, this fact is 
remarkable. 



It is significant to note, in this reference to the business, the 
statement on the part of the Insurance Superintendent, that 
' ' There is not recalled a single complaint made of any of the 
companies during the year, and, with a constituency in this State 
that is quite formidable and growing daily, this fact is remark- 
able. ' ' To those familiar with the manner in which the business 
had been managed, and with the prudent and conservative 
methods which had been employed in extending the business, 
the fact referred to was not remarkable, for special efforts had 
been made to give complete satisfaction to those most vitally 
interested in the business — that is, the Industrial policy -holders. 

The New York Tribune, also, in an article on Industrial 
insurance, dated July 10, 1884, concluded with the statement 
that "Some sentimental objections have been raised against 
Industrial insurance. The most serious charges are that it is 
used speculatively and induces infanticide. These objections are 
fully disposed of by the fact that actual experience proves them 
to be groundless. ' ' 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 153 

The charge of child-murder, for the purpose of obtaining the 
small amount of insurance to be realized at the death of the child, 
hardly received serious attention at this early period. The quota- 
tion from the Tribune and the quotation from the Pittsburg 
Dispatch clearly indicate that the charge was not considered 
worthy of consideration, but hostility to the business manifested 
itself from another direction, in an attempt made during the early 
part of 1884, by a negro member of the legislature of Massa- 
chusetts, to force companies to accept colored risks at the same 
rates as those charged the white population. As has been pointed 
out, this method of discrimination was based on a very careful 
investigation of the subject, and was fully supported by a large 
body of official statistics. It was well said by the Weekly U?ider- 
w?'itcr, that if the proposed measure ' ' does become a law, its 
success will be due to sentimental consideration alone. ' ' 

Unfortunately, such sentimental considerations have very 
materially influenced legislators at all times and on all subjects, 
and during the next few years laws were passed, in nearly all the 
leading States, compelling Industrial companies to accept negro 
risks at the same rates as those charged the white population. 
Fortunately, the companies can not be compelled to solicit this 
class of risks, and very little business of this class is now written 
b}^ Industrial companies, and practically none by The Prudential. 
The Prudential was the first company to discriminate against 
negroes, as stated in Mr. Dryden's letter of March 10, 1881, and 
in this attitude the Company was fully supported by the Insurance 
Commissioner of Massachusetts, who, in his report for 1884, stated 
that ' ' This was not a distinction on account of color, but on account 
of the difference in longevity between the two races, apparently 
supported by mortality statistics. That the distinction was dic- 
tated by race prejudice is not conceivable. The whole structure 
of life insurance rests upon a calculation of the probabilities of 
longevity and a just proportion of insurance charge to the risk 
taken, and to compel a company to insure for the same rates dif- 
ferent classes of people with different prospects of longevity would 
be to establish a grossly unjust discrimination against the longer- 
lived class in favor of the shorter-lived class. ' ' 

The progress of the Company during the year 1884, while 
not as great as during the preceding year, had nevertheless been 
considerable. The actual increase in policies was 50,877 against 



154 HISTORY OF THE PRUDENTIAL. 

77,910 during the preceding year. The financial and industrial 
depression of the period 1 882-' 86 had made itself felt in Indus- 
trial insurance, as well as in all other business operations. The 
business of the Company had been extended into new territory, 
and offices had been opened in the District of Columbia and 
Baltimore, Md. 

During the early part of the year, Dr. Leslie D. Ward, the 
Medical Director of the Company, and Mr. Dry den's associate in 
the founding of the Company, had been elected Vice-President in 
place of the Hon. Henry J. Yates, ex-Mayor of Newark, who was 
elected Treasurer of the Company. As Medical Director Dr. Ward 
had, from the beginning, shown exceptional executive skill and 
ability in managing the field operations of the Company, and while 
still occupying his former position, devoted himself with energy 
to the outside developments of the Company's interests. 

Dr. Ward has during late years been the executive manager 
of the Company's field force, and it is not too much to say that 
much of the success which the Company has achieved has been 
the result of his exceptional ability and devotion to the interests 
of the Company and to the promotion of its welfare. 

Various concessions and improvements in policy provisions 
were introduced at about this time and communicated to the field 
force under date of July 31 , 1884, in the following circular letter : — 

POLICY CONDITIONS AND CONCESSIONS. 1884. 

First. — All unnecessary verbiage has been omitted. The contract is 
plain and straightforward, and can be easily understood by any one. 

Second. — Every restriction upon residence or liberty to travel has been 
removed. 

Third. — The insured may engage in any occupation except military 
or naval service in time of actual war. 

Fourth. — The policy is incontestable after two years. 

The above concessions will be extended to all policies heretofore 
issued. 

A change in benefits and rates was made under date of 
October 6, 1884, when the infantile rates were very slightly 
reduced, and immediate benefits of one-quarter during the first 
six months, changed to no benefit during the first three months, 
one-quarter benefit during the second three months, and one-half 
benefit after the policy had been six months in force. A new 



THE PRUDENTIAL INS. CO. OF AMERICA, l88l-'84. 155 

clause was inserted, by which the Company assumed only one- 
half liability of any amount that might be due in case of death 
from consumption during the first policy year. A suicide clause 
had been inserted in the policy, which made the policy void if 
death from this cause occurred during the first three policy 
years. All restrictions as regards occupations were done away 
with, excepting military service, and an intemperance clause which 
had been early inserted in the policy was also eliminated. These 
changes in method were an indication of the careful supervision 
of the Company's interests, aiming rather at full justice to all 
policy-holders than undue liberality in the direction of impaired 
lives, or an otherwise undesirable class of insurance applicants. 
The actual business operations during 1884, as nas been stated, 
had, however, been much hindered by the existing industrial de- 
pression, and it is something very considerably to the credit of the 
Company and the efforts of its managers that as large an increase 
as has been referred to had actually been made. The effect of 
this depression on the insurance business is referred to in the 
New York "Insurance Report for 1885," from which I make 
a brief quotation : — 

The prosecution of the industrial insurance business during the year 
has been greatly hampered by the unfortunate situation of the laboring 
population, who, through a lack of employment and because of the numer- 
ous strikes, have not been in a condition, as a rule, to procure this protec- 
tion for their families.. In the face of these difficulties the companies have 
been active in their canvassing methods, with quite creditable results. The 
detail of their transactions is enormous, and needs unremitting attention. 
With almost an army of workers the opportunities for wrong-doing are 
numerous, but the system adopted by the several corporations serves to 
prevent irreparable injury. When the benefits and advantages to the 
dependents of our industrial citizens, arising from membership in these 
companies, are thoroughly understood, the work of the corporations will 
be an experiment no longer, for the protection thus guaranteed will be 
regarded as a necessity. The Superintendent is in hearty sympathy with 
this endeavor, by corporate action, to promote the welfare of our poorer 
people, and he has but encouragement to offer the promoters of the plan. 

By December 31, 1884, The Prudential had secured for itself 
an enviable position in the world of finance and insurance. With 
almost 325,000 policy-holders, old and young, with an aggregate 
insurance liability of $28,545,000, with assets of $752,878 and a 
capital of $115,000, the Company could now claim rank as one of 



156 HISTORY OF THE PRUDENTIAL. 

the leading insurance companies of the United States. This 
result had been accomplished in the short space of nine years, — 
nine years, however, of the most determined struggle and effort 
to make Industrial insurance a success in the United States. 

In commenting on the success of The Prudential and the 
annual balance-sheet for the year 1884, the Spectator referred 
to The Prudential and its methods and results in well-earned 
words of praise: "The Prudential was the pioneer industrial 
company, and has educated the American public to the advan- 
tages to be derived from small life or burial-fund insurance 
on the weekly-payment plan. * * * * The Prudential now 
operates in a number of States, over a wide field, and by the 
policy of scrutiny and good management maintained by the offi- 
cers each department, per se, is made to show a profit. The closest 
supervision is kept over the superintendents, assistant superin- 
tendents and agents, who are summarily dealt with for grievances 
reported and proved by policy-holders ; but, on the other hand, 
The Prudential bears a reputation for liberally treating its agents 
and employees, and for religiously studying their interests. 
* * * * The Prudential is essentially the people's company, 
furnishing, as it does, the facilities whereby even the poorest 
can obtain insurance to relieve their wants in times of dire 
necessity." * 

In a brief sketch of the history and progress of the Company, 
in commemoration of the tenth anniversary, published in the 
Spectator during the year 1885, Mr. Dryden contributed some 
very interesting facts pertaining to the early history of The Pru- 
dential, most of which have been taken account of in the earlier 
portion of this work. Among other interesting facts, however, 
Mr. Dryden stated that, on the first of January, 1885, the field 
force of The Prudential was estimated at 1,500, of which 34 were 
superintendents, 150 assistant superintendents and 1,200 agents, 
the balance being inspectors and special agents. The office force 
consisted of 55 male and 64 female clerks, besides the official staff. 

It has well been said that success in Industrial insurance 
is very largely a question of supervision and attention to detail, 
and it is difficult to convey an accurate idea of the magnitude of 
these transactions to those who are not personally familiar with 
the office management of Industrial companies. Everything 

* The Spectator, January, 1885. 






THE PRUDENTIAL INS. CO. OF AMERICA, l88l- 84. 157 

possible has been done to reduce clerical labor, waste and ex- 
penses to a minimum by method and system and the employment 
of special counting, calculating and other machines. In many 
of the most important improvements in policy contracts, such as 
the granting of dividends and paid-up policies, it has often been 
a most serious question as to how to provide for the necessary 
clerical labor in a manner at once efficient and yet economical. 
Having to deal with millions of policy-holders, the question has 
often been rather the expense of the necessary office transactions 
than the actual amount involved in the payments. Since these 
expenses or difficulties are largely inherent in the business, the 
best talent and ability has been devoted to the solving of prob- 
lems with which Ordinary life companies have never been called 
upon to deal. 



158 HISTORY OF THE PRUDENTIAL. 



CHAPTER X. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1885-1888. 

While the growth of the Company had been rapid and consid- 
erable, only a beginning had been made. New offices were opened 
as fast as the necessary agency and management force could be 
trained for the positions, and the Company rapidly extended its 
operations westward, having entered Ohio first, and then, in suc- 
cession, all the other States of the Middle West. The first office 
in Ohio was opened in Cleveland, on June 29, 1885, and very soon 
other cities were added to the Western department of the Company's 
business. From the start The Prudential had held firmly to the 
theory that for permanent business progress it would be better for 
the Company itself to develop an agency staff and the necessary 
force of district managers, than to go outside of its own office for 
new field material. Hence the Company made conservative 
progress, and developed a force of employees whose loyalty can 
not be matched by any organization of men in this country. 
While something was sacrificed to this policy of The Prudential, 
the Company has never had cause to regret its position in this 
matter, and is satisfied with the results. 

The business of Industrial insurance continued to receive 
considerable attention during the year, especially from experts 
familiar with life-insurance problems, and, among others, Mr. 
August F. Harvey, one of the leading actuaries of the time, 
made an investigation into the practice and results, the conclusion 
arrived at being communicated to the Weekly Underwriter, May 
23, 1885, as follows : — 

I also made inquiry into some matters connected with the industrial 
business. It is comparatively new here, but the results of the trial, so far, 
favor its excellence and its permanency. The great advantage to persons 
of very limited means of being able to carry a moderate insurance for a low 
weekly cost, collected at their homes, extends beyond the mere conve- 
nience of the matter to the individuals concerned. The system relieves 
such beneficiaries from their worst anxiety — the dread of burials at public 






THE PRUDENTIAL INS. CO. OF AMERICA, 1885-88. 159 

expense — and has actually, in many of the more populous quarters of the 
large cities, where extreme poverty prevails, had a marked influence in 
the reduced number of calls for aid in the public press ; it promotes small 
savings in people of higher advantages and encourages a thrift among the 
better classes who patronize the Company, which has its effect in the in- 
crement of the public wealth. I inquired particularly with reference to 
the public assertion, that the plan of furnishing insurances on infant lives 
was to invite child-murder, or such neglect as to bring its fatal results 
within the category of crime. If the statement is true in any degree, the 
foundation for it is so limited that it has not been particularly noticed. 

Mr. Harvey's conclusions were practically identical with 
those of Mr. Thomas B. Sprague, the President of the Institute 
of Actuaries of England, who had also extensively investigated 
the subject, and, as a result, expressed himself in favor of the 
business, stating that, from the standpoint of public policy, the 
system of Industrial insurance was fully deserving of the public 
support, which had come to it in increasing amount, as the 
beneficence of the plan became more widely known to the indus- 
trial population. Irrespective of these expressions of approval 
and confidence on the part of the most competent actuaries, The 
Prudential made its own observations and investigations, and 
continued to examine carefully its own experience in every direc- 
tion, and on this basis of fact and knowledge the Company rests 
its side of the argument. 

From year to year the business of the Company had increased, 
and at the close of 1885 the total number of Industrial policy- 
holders had increased to 422,671. A corresponding increase had 
been made in the assets, which now exceeded $1,000,000, with a 
comfortable surplus of $323,037. With such results obtained 
during so short a period as ten years, the Company could well 
afford to look hopefully into the future and view, with but a 
small degree of apprehension, the frequent attempts made to dis- 
turb the progress of the business by newspaper attacks, unwar- 
ranted and unfair competition and unwise legislation, attempting 
to interfere with the operations of the Industrial companies on 
grounds of sentiment and prejudice. 

Mention has been made of the passage of a law in Massa- 
chusetts, compelling Industrial companies to grant equal benefits 
to white and colored applicants. Following the Massachusetts 
precedent, a similar bill was introduced by a negro member into 
the Rhode Island legislature during March, 1886, which also 
became a law. The Prudential at this time transacted no business 



l6o HISTORY OF THE PRUDENTIAL. 

in Rhode Island, the Industrial business in that State being 
confined to the operations of one or two companies. 

In the adjoining State of Connecticut, Industrial insurance 
seems to have been further advanced, and considerable attention 
to the subject is given in the annual report of the Insurance 
Commissioner for 1886. Considerable space was devoted to the 
discussion of the business in general, and to the special require- 
ments as regards the valuation of Industrial policies. I quote 
the following remarks from Commissioner Williams's report, as 
illustrating the views of one who had evidently made himself 
thoroughly familiar with the subject : — 

Four of the twenty-seven companies whose transactions are consolidated 
in the statistics already given prosecute chiefly the business known as In- 
dustrial insurance. Policies average but little more than $100 in amount, 
and the premium is paid weekly. Five or ten cents a week, according to 
the age, will purchase an assurance of $100 for persons not past middle life, 
and thus a small provision for the future is brought within the reach of all 
who are insurable. The great body of workers dependent on slender daily 
wages ought to avail themselves of this plan, and not only great private 
but public benefit would result therefrom. The business is new in this 
country, but is extending rapidly. 

To these straightforward words of official approval of the 
business of Industrial insurance, from the standpoint of public 
policy, Commissioner Williams added the further service of a 
special recommendation in reference to the valuation of Indus- 
trial policies, based on a special report on the subject made by 
the Actuary of the Department, Mr. Sprague. Thus by 1886 
the business had secured not only further official approval, but 
at the same time further official recognition as a distinct form of 
life insurance, demanding separate consideration on account of 
its inherent peculiarities and its essential difference from the 
Ordinary plan of life insurance. The recommendations were 
accompanied by a valuable table of weekly annuities and assur- 
ances applicable to the Industrial method of insurance for persons 
of all ages from o to 99. 

The subject of Industrial insurance received additional con- 
sideration this year in the annual report of the Insurance Com- 
missioner of Massachusetts, from which I also make a brief 
abstract : — 

The term "industrial" or "prudential" is employed to distinguish a 
class of insurance for small amounts for weekly premiums of a few cents 



THE PRUDENTIAL INS. CO. OF AMERICA, 1885-88. 161 

each, such as persons of humblest means, dependent upon the wages of 
their labor or other limited income, can spare from their urgent necessities. 
The provision such insurance makes is only for the relief of immediate 
family needs created by the death of the insured, and when effected on the 
life of an infant of unproductive age and condition can properly provide for 
little more than decent burial charges. Ordinarily the life of an infant of 
tender years can not be deemed to have an insurable value, and for a parent 
to speculate a profit from the death of his offspring is repugnant to the 
natural feelings and to public morals. But a provision by insurance for 
the cost of sacred decencies to the relics and memory of the dead is worthy 
and legitimate. 



The Massachusetts Commissioner also referred to the fact 
that the Germania Life Insurance Company had discontinued the 
transaction of Industrial business, but had made an equitable 
arrangement with the policy-holders, by which the premiums were 
collected in the manner originally agreed upon. The last 
Industrial policy written by the Germania was dated Decem- 
ber 27, 1886, and this closed the second unsuccessful attempt 
on the part of an Ordinary company to transact an Industrial 
business, the Provident Savings having previously abandoned a 
similar effort. The principal reason on the part of these com- 
panies for discontinuing the Industrial business must needs have 
been the fact that the business was exceedingly unprofitable dur- 
ing the early years of operation, and it must have been real- 
ized that it could only be made successful by the application of 
exceptional ability and industry 7 . The Prudential Insurance 
Company of America, like other Industrial companies, including 
the Prudential of England, had passed through a period of 
financial difficulties, but by careful management and unremitting 
industry it had now reached a position where ultimate success 
on a large scale was only a question of a few years. 

Apart from the words of encouragement and approval of Indus- 
trial insurance companies by actuaries and insurance officials, and 
the general public approval as manifested in the increasing num- 
ber of policy-holders, evidence is not wanting to show the indi- 
vidual appreciation of the beneficence of the business. As a per- 
tinent illustration of the value of Industrial insurance from the 
standpoint of public policy, I give space to the following letter 
signed by one of the Sisters in charge of the Troy Hospital, of Troy, 
N. Y. It would seem that a young woman by the name of 
Elizabeth Flynn had died in the hospital, on the 5th of April, 



1 62 HISTORY OF THE PRUDENTIAL. 

from pneumonia. Some seven months before she had been pru- 
dent enough to take out an Industrial policy with The Pru- 
dential, paying a weekly premium of only five cents. The 
Industrial policy would seem to have been the only means of 
providing for a respectable funeral. The letter will indicate 
the favorable view of Industrial insurance held by the Sister 
Superior : — 

Poor Miss Flynn, before she died, requested that I should look after the 
interest of her policy and to see that she had a respectable burial, all of 
which I have done. I think this branch of insurance is an excellent thing 
for poor people, especially so when the Company is so prompt when called 
upon for settlement. There is no trouble about it. When Elizabeth died 
I notified the superintendent at room 3, Harmony Hall. He came imme- 
diately for the necessary information, and has given me a check for the 
amount the policy called for. I feel interested and would not hesitate to 
recommend the Company and its system to all who are desirous to make a 
provision for themselves or their families. 

Sister Angeune, Troy Hospital. 

As another instance of the value of the system of Industrial 
insurance, I give space to an item which came to public notice 
during the year 1885, and which I quote from the Insurance 
Record of June of that year : — 

Industrial life insurance is permeating the entire community. At the 
recent fire at Sullivan & Company's printing and binding establishment in 
Cincinnati, seventeen young ladies were working upon the fifth floor of 
the bindery. Of these, fifteen were burned to death. Of the fifteen^ seven 
had industrial policies. Their total insurance amounted to $1,102. Some 
of the policies were recently issued and were thus not in full benefit, but 
$641 was the amount due, and this was paid the day the proofs of death 
were received. The total premiums on the seven policies amounted to 50 
cents a week. The gross sum received on all the policies was $18.15. 

It is self-evident that such instances as these had a measur- 
able effect in promoting the growth of Industrial insurance 
among the industrial population, a population ever confronted 
by contingencies leaving practically no choice between insur- 
ance and decent interment or improvidence and the pauper's 
grave. 

The actual extent of the public benefit already achieved 
during the short period of the Company's operations is illustrated 



THE PRUDENTIAL INS. CO. OF AMERICA, 1885-88. 1 63 

in the following table, showing the claim payments made by The 
Prudential during the first ten years of its history : — 

PAYMENTS MADE TO POLICY-HOLDERS BY THE PRUDENTIAL 
INSURANCE COMPANY. 1876- 1885. 



Payments to 
Policy-holders. 



1876 

1877 

1878, 

1879, 

1880, 

1881, 

1882, 

1883, 

1884, 

1885, 

1876-1885, 



$1,958 00 

5,296 00 

11,338 00 

23,013 OO 

57,256 00 

111,508 00 

157,706 00 

222,083 OO 

322,382 OO 

418,622 OO 



$1,331,162 OO 



It will be observed that during the first decade of business 
operations more than $1,331,000 had been disbursed in claim pay- 
ments, rarely exceeding $100, often as low as $15, and sometimes 
as high as $500. By 1885 the annual disbursements had exceeded 
$400,000, which for the time represented a vast sum to be disbursed 
in insurance claims among a population not previously provided 
for in this manner. Much of the success of the Company must be 
attributed to its method of paying claims within twenty-four hours 
after proofs have been received at the home office, and often imme- 
diately upon the presentation of facts which leave no doubt that 
the claim, on office examination, is in all respects satisfactory. 
The Companjr, from the beginning, had acted on the principle 
that where the money was needed it was needed at once, but 
at the same time no safeguard was left out of consideration for 
the full protection of the best interests of the Company and its 
policy-holders. 

A critical period in the Company's history had been reached, 
which required the most careful consideration and executive 
skill in devising means to provide for the increasing demands 
in directions not anticipated when the Company was estab- 
lished, ten years before. Large numbers of the Company's 



164 HISTORY OF THE PRUDENTIAL. 

policy-holders had gradually become educated in life-insurance 
principles, and the tendency of life insurance towards small 
amounts had been considerably extended upward, — that is, 
towards a class of people somewhat better off in material good 
things and able to pay larger premiums, insuring for larger sums 
on the weekly-payment plan. The average amount of Industrial 
policies, as well as the average premium, was observed to be 
gradually increasing, tending to confirm this view, and it had 
become clear to the officers of the Company as early as 1880, 
as was later so ably pointed out by Mr. Charles Booth in his 
work on " Pauperism and the Endowment of Old Age," 
that ' * Provision in this way — that is by Industrial insurance — 
against death has become very general in recent years ; and I am 
told that the amounts insured with such companies as The Pru- 
dential tend continually to increase, showing that something 
beyond mere funeral expenses is thought of. Here we have an 
active and natural growth of thrift which it will be wise to leave 
alone, except in so far as its action can be facilitated or its benefits 
made more secure. ' ' * 

Already in 1880 a new policy had been offered, by which it 
was possible to insure for even sums of $500, but the present 
demand was rather for a form of insurance providing not only a 
burial fund, but, at the same time, a fairly substantial support for 
the surviving members of a family; hence this year the Company 
offered to the public a ' ' Special Adult ' ' policy, which among 
other provisions contained what was, for the time, a most liberal 
and novel concession to Industrial policy-holders, namely, a non- 
forfeiture or extended insurance clause, to take effect after the pol- 
icy should have been in force for a period of at least three years. 

By 1886 the Company was therefore able to take the first step 
in the direction of non-forfeiture provisions in Industrial insurance 
policies, which had been contemplated and aimed at in Mr. Dry- 
den's early efforts, but which, on the best actuarial advice, were not 
expedient at the time, in the absence of actual experience gained 
by Industrial companies. Reference is made to the new policies 
and slight changes in the table of Industrial rates, in the follow- 
ing letter to the field force, dated January 4, 1886 : — 

After mature consideration, the Board of Directors have decided to in- 
crease slightly the Benefits under our present table, and hereafter policies 

* p. 156. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1885-^88. 165 

will be issued according to the schedule hereto annexed. Claims under 
policies hitherto issued will in future be adjusted according to the new 
table. We hope our members will see, in this voluntary action on the part 
of the Company, an evidence of that fair and liberal spirit with which it has 
been our aim in the past, and in which for the future we expect to deal with 
our policy-holders. 

The Board has also authorized the issuance of Adult Policies for amounts 
from $500 to $1,000, under a Special Table of rates somewhat more favor- 
able to the insured than the $500 Table previously issued. You will find 
this Table of benefits also hereto annexed. Applications for these policies 
must be upon a special form which will be sent you. A special Medical 
examination will be required, for which the Company will pay $1. Policies 
under this table will be issued with the following condition : — 

If after the payment of the weekly premium hereon for three or more 
years this Policy shall become void by reason of default in payment of pre- 
miums, the Company agrees to issue a paid-up policy for the sum hereby 
insured, for a term of as many weeks as the number of times the full legal 
reserve upon this Policy at the time of forfeiture contains the premium for 
said sum insured, at the age of the insured at the time of the lapse, accord- 
ing to the published rates of the Company for Special Industrial whole-life 
policies ; provided that the Policy shall be surrendered to the Company and 
application made in writing for such paid-up policy within sixty days after 
default in the payment of premiums hereon. 

This new form of policy and the important concession of 
paid-up insurance constituted a further distinct step in the direc- 
tion of extending the Industrial insurance system to the masses 
and the development of what, for want of a better name, I have 
elsewhere called Industrial-Ordinary — that is, insurance for any 
amount, small or large, with premiums payable on any plan, 
and designed to meet the demands of all the various elements 
of the American population. The business, after ten short years, 
had outgrown the earlier conceptions ; it had been modified 
according to American experience, and had been strictly adapted 
to the social and economic conditions of a rapidly improving 
Industrial population, where the poor of to-day are the well-to- 
do of to-morrow and the rich of later days. 

Taking into account the facts of the Company's own experi- 
ence, The Prudential had placed the Special Adult policy on the 
market, and, as a further evidence of rapid adjustment to improved 
conditions and specific demands, commenced the issue of regular 
Ordinary life policies on plans identical with those of the leading 
Ordinary level-premium companies of the time. The first Ordi- 
nary policy was written on January 19th of the year 1886, and 



166 HISTORY OF THE PRUDENTIAL. 

by the end of the year 427 of such policies, for a sum of $585,500, 
were in force on the books of the Company. The Industrial 
business by the close of 1886 had reached 548,433 policies, 
insured for $59,328,627. The actual increase in business had 
been over 125,000 policies, or at a rate of 29.8 per cent, over the 
number in force at the end of the previous year. A corresponding 
improvement had been made in the finances of the Compan}?-, 
and the assets now exceeded $1,425,000, with corresponding lia- 
bilities of over $1,019,000, leaving a substantial surplus of over 
$406,000. 

By January, 1887, The Prudential operated in eight States, 
including Missouri, where an office had been opened in the city 
of St. L,ouis. In commenting upon the progress made by the 
Company, Mr. Dry den, at the annual reunion of officers and 
agents, at the Academy of Music, made mention of the fact that 
' ' The policy of The Prudential has been to make haste slowly, 
and it is only a few years ago that we ventured outside of the 
State ; now its agents are in eight States in the Union, and, 
among others, we have in Pennsylvania a membership of 140,000, 
in New York 180,000, in New Jersey 185,000 ; of the latter 
70,000 policies are in force in the city of Newark." 

The work of The Prudential had now become sufficiently 
known to attract public attention, and one of the New York news- 
papers, under date of February 6th, contained a full description 
of the system and objects of The Prudential, from which I make 
a few brief extracts : — 

If you were to go into any of the many little towns and villages which 
lie thickly clustered together in the vicinity of Newark, N. J., and were to 
talk with the families of limited means, or if you were to make a canvass 
of the homes of the industrial classes in the great manufacturing city just 
named, you could insure for yourself the discovery of at least one subject 
of common interest to all with whom you came in contact, by mentioning 
the name of The Prudential Insurance Company of America. Here is an 
institution which, though but eleven years old, has taken a firm hold upon 
the confidence of the people for whose benefit it was established, and which 
is doing splendid and beneficial work in all the territory upon which it has 
entered — a territory, however, which, as you will presently see, is by no 
means limited to the region I have mentioned. In recent Sunday chats I 
have described two novel and successful schemes of insurance. Theschcme 
of Industrial life insurance as exemplified in this great insurance company 
of Newark, N. J., can scarcely be called novel, inasmuch as it has been in 
successful practice for nearly a dozen years and was founded upon equally 
successful experience in London, England ; but the subject is one which 



THE PRUDENTIAL INS. CO. OF AMERICA, l885~ 7 88. 167 

I do not think is as widely understood or appreciated as it should be, and 
which is deeply interesting. 

On Broad street, in Newark, N. J., stands a spacious, handsome and 
substantial building, exclusively devoted to the business of The Prudential 
Insurance Company of America. In 1875, when, in the face of great dis- 
couragement, this Company was organized, a small office adequately accom- 
modated the transaction of its business. To-day the fine structure on 
Broad street is becoming too small for the transaction of that business. 
Other insurance companies talk about millions, but they are millions of 
dollars, not of policy-holders. Can you point to any other company in the 
United States that had issued anything like this number of policies ? This 
is truly a company of the people, for the people. How does it differ from 
other companies? Simply in this, that it is designed not as a means 
whereby a man, in sufficiently affluent circumstances to be able to pay the 
heavy premiums charged by other insurance companies, can arrange to 
leave a fortune to his heirs, but simply for the immediate benefit of poor 
families into which death enters as a doubly great affliction, bringing not 
only the pangs of bereavement, but the misery of debt. It is a system 
which enables even the poorest families to provide for the decent burial of 
each member of such families. It is a feature of The Prudential Insurance 
Company that death claims are paid within twenty-four hours after proofs 
of death are presented. Granted that a company of this description is 
honestly and honorably conducted, its blessings to the great army of wage- 
workers must be admitted. That the affairs of this Company are so con- 
ducted is proved by the fact that it has been admitted into the insurance 
field of eight different States, — New Jersey, New York, Pennsylvania, 
Maryland, Delaware, Ohio, Illinois and Missouri, — and also into the District 
of Columbia. This fact alone, under the strict and just insurance laws 
existing in these States, should be a sufficient guarantee of the soundness 
of the system and the standing of the Company, but the figures found in 
the last annual statement of the Company speak for themselves. 

It is to Mr. John F. Dry den, now the President of The Prudential, 
that the United States is indebted for the establishment here of this plan 
of Industrial insurance which had proved to be such a blessing to the work- 
ing people of England. He organized the Company and then, with the 
consent of the Board of Directors, went to England, where he made a 
thorough study of the system of Industrial insurance. I regret that space 
will not allow me to describe in detail the systematic and splendidly organ- 
ized manner in which the business of this Company is conducted. Over 
2,000 persons are employed at headquarters and in the field. 

Is there any wonder that this system of insurance is popular with the 
people, and that the number of policies issued exceeds a million and a half ? 

The success of the Company, no doubt, attracted the atten- 
tion of other insurance managers, and a number of attempts were 
made this year to establish new Industrial companies ; among 
others, the American Life Insurance Company of Philadelphia 



1 68 HISTORY OF THE PRUDENTIAL. 

made a short and unsuccessful attempt, while a more satisfactory- 
effort was made by the People's Insurance Company of Norwich, 
Conn., organized by some of the leading citizens of that State.* 
Actual business operations were commenced by the latter company 
in 1888, and continued with a fair degree of success for a num- 
ber of years ; but after having given the business a sufficient 
trial, the company discontinued operations, reinsuring its risks in 
one of the leading life companies. Few experienced underwriters 
could properly estimate the enormous difficulties in the way of 
success in the operation of an Industrial company. Few could 
realize that it required exceptional talent and exceptional aptitude 
to make this branch of the insurance business a success. The ques- 
tion has often been asked why it is that there are so few companies 
like The Prudential, the Metropolitan and the John Hancock, f 
that have succeeded on a large scale. The answer is that, while 
there are to-day some ten or eleven other Industrial companies 
operating successfully on a small scale, it is only through men of 
exceptional ability and by the most arduous efforts that Industrial 
insurance can be made a profitable and secure business enterprise. 
Fortunately for the good name of the business, the companies 
which organized unsuccessful Industrial branches, or which had 
been organized for the distinct purpose of transacting an Indus- 
trial business and had failed, discontinued their efforts in an 
honorable manner. Not a single dollar has ever been lost to 
an Industrial policy-holder on account of the failure of a legiti- 
mate Industrial company. The peculiar difficulties confronting 
those who would undertake new enterprises of this kind are well 
stated in an article in the Spectator for December, 1887, which, in 
addition, contains some pointed references to other aspects of the 
business, which may properly find a place in this summary 



* Mr. David A. Wells, the well-known political economist and writer 
on taxation, was one of the incorporators of this company. 

f Among the smaller Industrial companies, The Life Insurance Com- 
pany of Virginia, with its home office at Richmond, Va., has been excep- 
tionally successful in the Southern States. This company had been 
organized as an Ordinary company in 187 1 and met with but very modest 
success until, in 1887, an Industrial department was added, which by slow 
degrees has reached proportions of considerable magnitude. The first 
Industrial policy of the Life Insurance Company of Virginia was issued in 
April, 1887, although a few so-called Prudential policies had been issued 
in the cities of Richmond and Petersburg during the years 1880- '87. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1885-88. 169 

statement of historical facts pertaining to the origin and growth 
of The Prudential Insurance Company : — 

The peculiar features of industrial companies are such as to almost 
preclude the possibility of combining them with other forms of life insur- 
ance successfully. The number of agents required in the field for canvas- 
sing and collecting purposes is equivalent to a small army. Each one of 
these is selected because of his special qualifications to deal with the class 
of persons insured, for they have to be handled with much tact, and the 
agent must possess a good knowledge of the condition of each one of his 
clients, ascertaining his earnings, habits, etc. Furthermore, the agent 
must be punctual, and appear promptly to receive his premium at the 
time specified in each instance, or he is liable to be disappointed. Hun- 
dreds of men have undertaken to do this work and given up in despair 
after a few days' or a few weeks' experience, being wholly unqualified to 
deal with the working people. The amount of good accomplished by 
these industrial insurance companies is not to be measured solely by the 
amount of money paid to the beneficiaries under the policies issued, for it has 
been the means of introducing frugality where previously reckless extrav- 
agance had reigned. The money to pay the premiums is often saved from 
the beer or the tobacco allowance of the man, while the women, who have 
become familiar with the usefulness of the system, practice all sorts of 
economies to save enough from their household expenses to pay the 
required weekly premium. The companies are overwhelmed with letters 
from persons who have been benefited by this plan, testifying to the 
manner in which they have been relieved from the direst distress by the 
receipt of the money secured to them by one industrial policy. It is a 
good thing for the community that this form of insurance has come into so 
general favor, for it is imparting ideas of economy and prudence among 
a class of persons who sadly need such teaching. 

The business progress of The Prudential during the year 
1887 had been exceptionally satisfactory. The net increase in 
Industrial policies in force was 188,476, equal to 34.4 per cent. 
The assets of the Company had increased to almost $2,000,000, 
while the surplus had increased to $487,078. Some progress had 
been made in the Ordinary branch, showing an increase from 
427 policies in force at the close of 1886 to 735 policies, for the 
sum of $945,000, in force at the close of the year 1887. 

In commenting upon the twelfth annual statement of the 
Company, published during the early part of 1888, the New York 
Tribune repeated its former words of approval of Industrial 
insurance, stating that — • 

The Prudential is an invaluable help to the poor and middle classes. 
It paid in death claims, during the year 1887 alone, nearly one million of 



170 HISTORY OF THE PRUDENTIAL. 

dollars. In addition to this great benefit it is working a revolution among 
the working classes in fostering habits of thrift and foresight, which 
redound to their profit in numerous ways. That they appreciate their 
relation to it is shown from the fact that about three-quarters of a million 
of persons hold policies in this Company. 



Mention has been made of the improvement in policy condi- 
tions made by the Company during the preceding years. The 
most important concession made to policy-holders was the addi- 
tion of a paid-up or surrender-value clause in the Special Adult 
policy issued for the first time during 1886. However desirable 
it would have been to have extended this provision to regular 
Industrial policies, it was inexpedient to make such a concession 
at that time, partly because the business was in its initial stage 
and partly because the necessary experience for such an impor- 
tant concession had not been gained. This step, however, must 
be regarded as proof of the Company's honest intention to deal 
equitably with all its policy-holders, and it is something very con- 
siderably to the credit of The Prudential that this important con- 
cession was made before the State Legislatures had attempted to 
force Industrial companies to grant surrender values on Industrial 
policies. I recall these facts in view of an attempt made during 
the early part of 1888, in the State of New Jersey, to pass a bill 
compelling Industrial companies to grant non- forfeiture privileges 
after a policy had been in force for only two years. It will be 
recalled that, as far back as 1880, a special committee of Insur- 
ance Commissioners had reported adversely on the proposition to 
compel Industrial companies to grant surrender values. The 
merits of the case are best set forth in the following quotation 
from the Insurance World, which will make clear the Company's 
side of the argument, at the time when this attempt was made to 
burden the business of The Prudential with legislation adverse to 
the best interests of its policy-holders : — 

The rapid strides made by the companies doing Industrial business has 
brought its natural result in awakening the attention of the legislators, and 
a bill has now been introduced in the New Jersey Legislature to render in- 
dustrial policies non-forfeitable after they have been in force for two years. 
The absurdity of this lies in the fact that most of these policies average less 
than $150 each. The net reserve at the end of the second year at age 
twenty-five would be 12.28 per thousand by the American Experience 4^ 
per-cent. table. A policy for $150 on the ordinary life plan would accumu- 
late in two years a reserve of $1.93 only. But Industrial insurance is only 



THE PRUDENTIAL INS. CO. OF AMERICA, l885~'88. 171 

term insurance in fact, and the reserve would be so infinitesimally small 
that a good actuary with a powerful glass would scarcely be able to distin- 
guish it. In fact the paid-up insurance would hardly be large enough to 
pay the fare of the individual who should go to collect it. 

The subject was also referred to in the annual report of the 
Insurance Commissioner of Ohio for 1888, to which the Chronicle 
of New York, under date of July 26th, replied in the following 
manner : — 

We think a number of reasons can be given why the granting of sur- 
render values to Industrial policy-holders after the time mentioned by the 
Ohio Commissioner would be impracticable, not to say inexpedient. Some 
of the reasons may be briefly mentioned. The average Industrial policy is 
small, probably not much more than $100. The reserve on a policy for this 
amount is very small indeed at the end of two years ; in fact, it would not 
amount to a large sum at the end of ten years, whatever the age of the in- 
sured. The expense of actuarial calculation of the surrender value and the 
deduction of a proper surrender charge would make the " equitable surren- 
der value " in many cases an infinitesimal sum. In short, the cost of valu- 
ing Industrial policies as suggested by Mr. Kemp would very likely be 
heavy enough to offset any possible benefit the lapsing policy-holder might 
derive. Moreover, the lapse tendency in Industrial insurance is very 
strong. The Prudential, whose experience the Ohio Commissioner quotes, 
lost over 320,000 policy-holders last year by lapse. Undoubtedly the major- 
ity of these lapses were on policies that had been in existence less than two 
years ; still a considerable number of the policies had probably reached that 
age. The chief obj ect of Industrial insurance is to furnish a burial fund. A 
matter worthy of careful thought is the question whether whatever forfeit- 
ure there is in this plan of insurance might not better remain what it now 
is, a slight inducement toward persistence. Industrial insurance is trans- 
acted on the stock principle. There are no dividends, and the premiums, 
while necessarily relatively large, are not excessive when the tremendous 
cost of weekly collections is taken into account. The opinion which Mr. 
Kemp appears to hold about the ratio of profit in the Industrial business in 
Ohio will probably be modified in a few years, when this kind of insurance 
has been prosecuted longer in his State. 

Without discussing at length so involved and complex a 
question as the Company's practice in dealing with lapsed Indus- 
trial policies, I need only repeat, what I have stated in the begin- 
ning, that Mr. Dryden and his associates had fully considered this 
question before a single policy had been issued, and the subject 
received constant attention during every year of the Company's 
early existence. After sufficient experience had been gained 
The Prudential was the first Industrial company to grant not 



172 HISTORY OF THE PRUDENTIAL. 

only paid-up policies, but also cash-surrender values to Industrial 
policy-holders. 

Attempts were made this year to create a class sentiment 
against Industrial insurance by sensational newspaper articles on 
the subject of life insurance for minors. The year previous, 
articles had appeared in St. Louis newspapers reflecting upon 
the practice of Industrial companies, while this year they were 
confined to a few newspapers of Philadelphia. 

This agitation, no doubt, was largely the result of an effort 
on the part of the Seventh Ward Charity Organization Society 
of Philadelphia, which had petitioned the Pennsylvania Legis- 
lature to secure legislative prohibition of the life insurance of 
children, on the ground that mothers were likely to murder their 
children for the purpose of obtaining the small amounts of insur- 
ance receivable at death. The argument in favor of adverse 
legislation on the subject of life insurance of children, from the 
viewpoint of the Philadelphia Charity Organization Society, 
was well answered in a brief article in the Standard of Boston, 
under date of November 3, 1888, as follows : — 

A Philadelphia charity organization declares its intention of memorial- 
izing the next Pennsylvania Legislature to abolish infant insurance. This 
idea was doubtless fed and fired by the half-baked newspaper articles that 
have followed one or two sporadic cases of maltreatment of insured infants. 
Adopting momentarily, for the sake of argument, the low view of human 
nature evidently held by these Philadelphia philanthropists of small 
research, a little painstaking would have taught them that infant insurance, 
as carried on by the reputable companies, is so arranged as to offer no 
incentive for manifestations of avaricious cruelty or crime. But even if 
this were not so, we have greater faith in our fellow-beings than to believe 
them capable of such horrible practices for the ignoble pittances they would 
secure. 

I have made mention of these fragmentary evidences of the 
increasing opposition to the practice of Industrial companies 
in accepting small risks on the lives of children for burial pur- 
poses, to account for more recent and more determined oppo- 
sition to this branch of the business, to which reference will be 
made later on. 

Whatever might then or now be said or thought of Indus- 
trial insurance from the standpoint of public policy or of the 
individual policy-holders, this much is certain : it is this form 
of life insurance for the masses which alone has survived in the 



the: prudential ins. co. of America, i885-'88. 173 

struggle for existence, has accomplished what it set out to do, has 
increased in extent of operations from year to year, with never a 
check or evidence of diminishing popularity, and represented at the 
close of 1888 a more formidable array of figures and facts in its 
own support than could be marshalled in behalf of any other form 
of life insurance or investment in America. While, previous to the 
organization of The Prudential, a large number of efforts had been 
made to organize insurance companies or societies for the benefit 
of the industrial population, not one had succeeded in reaching a 
sufficient degree of popularity or of financial security to survive 
more than a score of years at the most. But these efforts had not 
come to an end with the organization of an Industrial company, 
they had not been seriously hindered by the growth of Industrial 
insurance in all parts of the country, but in a measure, and 
contrary to expectation, an increasing number of ventures in all 
directions had been made to compete with the legitimate form 
of Industrial life insurance by methods offering cheap insurance to 
a large element of the population still unfamiliar with insurance 
principles, and unfamiliar with the past history of unsuccessful 
insurance enterprises. Among a large number of pseudo-life- 
insurance efforts made during the early years of Industrial insur- 
ance history, I have already made mention of some, and space is 
not at my command to deal exhaustively with this subject. Near 
the close of 1888, however, the operations of pseudo or bogus 
imitations of Industrial companies had increased to such an 
extent that the State Department of Insurance of New Jersey 
found it necessary, in an open circular, to warn the public to 
beware of the Industrial Association of America, with offices at 
Newark, N. J. According to the Investigator, October 13, 1888, 
"This fraud is evidently attempting to trade on the high commer- 
cial standing and long-established reputation of The Prudential 
Insurance Company of America. The similarity of names would 
be traded on to the advantage of the fraud and disadvantage of 
the legitimate corporation. ' ' 

An apparently honest but rather curious effort in the direc- 
tion of workingmen's insurance for burial purposes was made 
this year, at Camden, in the State of New Jersey, by the United 
States Funeral Directing Company, which proposed to operate 
on a plan entirely new and different from any other method of 
insurance provision against contingencies. A somewhat similar 
effort in this direction had been made as far back as 1873, in 



174 HISTORY OF THE PRUDENTIAL. 

Richmond, Va., and, no doubt, in other cities also, but without 
success. The object of the Camden company was to provide 
for a decent interment at a cost of from $30 to $100, but after a 
brief experience the attempt was discontinued. The reasons for 
failure are that life insurance on the Industrial plan, after the 
initial stage has been passed, aims at more than mere provision 
for burial expenses. Persons will begin by insuring for five-cent 
premiums for burial purposes, but after a year or more increase 
their premiums to secure a sufficient sum to pay the cost of the 
last illness ; later on, by further increase in premiums, provi- 
sion will be made for dependents, and in this manner a more 
complete purpose, as in Ordinary insurance, is secured or 
largely realized. Hence, the failure of the Funeral Directing 
Company came not unexpectedly to those who had made a 
thorough study of Industrial insurance underwriting. 



THE PRUDENTIAL INS. CO. OF AMERICA, l889~'9I. 175 



CHAPTER XI. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1889-1891. 

The difficulties which had been experienced during 1888 had 
not materially hindered the progress of the Company, and by 
the close of the year there were over 850,000 Industrial policies 
in force. In addition there were now, in the Ordinary branch, 
915 policies in force, indicating a slight but substantial increase. 
The growth of the Company made necessary the serious consid- 
eration of the erection of a home-office building, and during the 
year a plot of ground on Broad street was purchased for the 
purpose of erecting thereon, in course of time, a substantial 
structure. The Insurance Times, in its issue of December, 1888, 
quotes from the Newark Daily Journal the following reference 
to the real estate transaction : — 

In a few years The Prudential Insurance Company will erect, at the 
corner of Broad and Franklin streets, a building that will be an ornament 
to the city. The plot of ground owned by the Company has a front of 89 
feet on Broad street, and it runs back 160 feet to an alley. It is proposed 
to have a large open court in the middle of the plot, with an entrance from 
the alley for carriages, and the building to rise on four sides to a height of 
six or more stories. But the managers will not decide upon any plan 
until after the finest buildings in this country and Europe have been 
inspected, the aim being to construct an edifice that will meet all the 
requirements of the rapidly increasing insurance business. Plenty of 
light and air will be needed for the army of male and female clerks and 
other employees, for the Company has so prospered since its organization, 
thirteen years ago, that over 800,000 payments are now recorded weekly at 
the home office in Newark on life-insurance policies. The Company 
employs several thousand clerks and agents, and is extending its business 
to the growing towns in all the States and Territories. 

For reasons which need not be dwelt upon, the Company, 
very soon after this transaction, did not consider the property 
sufficient for its purpose, and during the early part of 1889 one 



176 HISTORY OF THE PRUDENTIAL. 

of the most desirable pieces of real estate in Newark, in the 
heart of the city, with a frontage of 70 feet on Broad street, 
was purchased for the sum of $275,000, as a site for the home- 
office building, to be constructed during the next few years. 
According to Insurance under date of February 8, 1889, "It is 
the intention of the Company to erect on this lot a substantial 
and handsome building for the accommodation of its own vast 
and growing business and affording large room for rental pur- 
poses. The work of construction will not be begun for some two 
years, for the Company's lease of its present quarters has still 
four years to run, and after the plans are fully matured something 
like two years will be taken for carrying them out. The Pru- 
dential has never been in a hurry from the beginning. It was very 
particular about foundations. And it built to stay. ' ' 

A further reference to the purchase of the property and the 
proposed home-office building of the Company occurs in the 
Insurance Critic for March, 1889 : — 

The Prudential Insurance Company of America, which so successfully 
conducts the business of industrial life insurance from its home office at 
Newark, has recently purchased a valuable and central site in that city, with 
the design of erecting thereon a commodious and handsome office build- 
ing, that shall be an architectural ornament to the place. The property 
is situated at the corner of Broad and Bank streets, and was bought from 
two owners ; the larger part from Justice Joseph Bradley, of the United 
States Supreme Court, for $275,000, and the balance, known as the Wiss 
property, for $38,000, the entire outlay being $313,000. The frontage is 
70 feet on Broad street, 265 feet on Bank street, and 140 feet on Library- 
court, and the entire plot contains 25,000 square feet. The new edifice will 
be built on the portion purchased from Justice Bradley, and will be so con- 
structed that an extension in harmony with the main design can be erected 
when the growing business makes it necessary. * * * * The general 
design is to put up a nine-story, fire-proof building, in size 70 by 231 feet, to 
cost about $500,000. All the conveniences and improvements devised by 
modern skill and art will be introduced. It is believed that the favorable loca- 
tion and the interior attractions will occasion a large demand for offices in the 
space on the several floors not required by the company itself for the trans- 
action of its business. The company will make use of the larger portion 
of the building in its own work. When it entered its present home office, 
less than six years ago, its clerical force for the office was below fifty ; it 
now employs two hundred and twenty-five clerks. At first it rented out 
the two upper floors, but increase of business soon compelled it to occupy 
the entire edifice, from basement to attic, to hire the basement in the 
adjoining building for the construction of additional vault room, and to 
place its local agency force in other parts of the city. The company's 



THE PRUDENTIAL INS. CO. OF AMERICA, 1889-91. 177 

employees are now numerous enough to form a circle of society by them- 
selves. They have organized a literary and musical association, which 
holds regular semi-monthly meetings. The Prudential "Old Guard" in- 
cludes those who, having served the company faithfully and continuously 
for certain periods, are presented with certificates and badges, bronze 
badges for five years' service, silver badges for ten years, gold badges 
for fifteen years, and gold badges with a diamond set in each for twenty 
years. The members [of the Old Guard] receive also special consideration 
in their business dealings with the office. The company's growing business 
and increasing clerical force show the need of enlarged accommodations. 
The building to be erected will also be a monument to the prudence and 
forethought of the company's large clientage. Nearly a million people 
hold its policies, and of this great number about one hundred thousand are 
in Newark and its near vicinity. 

The plans of the Company with respect to the proposed 
building were carried out practically in accordance with the pre- 
ceding outline, ground was broken in September, 1890, the new 
building was completed during the early part of 1892, and actual 
possession was taken on May 1, 1892. So rapid, however, was the 
growth of the Company, and so promising its future, that steps 
were taken to purchase more real estate than was required at that 
time, and during the latter part of 1889 an additional portion of 
real estate was purchased contiguous to that previously acquired. 
The subject will be further referred to under its proper date. 

The good work of the Company had continued to be appre- 
ciated, and volumes could be filled with the expressions of public 
approval to be found in the records and archives of The Pruden- 
tial. One of the earliest friends of the Company, when the busi- 
ness was in its infancy, had been the Metuchen Inquirer, cordially 
approving of the then new and untried plan of Industrial insur- 
ance, when the same was first made known to the people of New 
Jersey. I can not do better than quote from an issue of this 
same paper, during the early part of 1889, a few words of further 
commendation of the results of Industrial insurance, as observed 
in this community : — 

The total amount paid in claims to relatives of deceased policy-holders 
has now reached nearly $4,000,000. The benefit derived from these pay- 
ments is incalculable, because it may be said that in many, if not in the 
majority of cases, these policies were the only available asset which the 
relatives of the deceased had at the time of their death. That the masses 
are coming fully to realize the great value of Industrial insurance in a 
strong, reliable company is shown from the fact that The Prudential has 
now about 900,000 policies in force. They paid over 13,000 claims in 1898. 



178 HISTORY OF THE PRUDENTIAL. 

The Prudential had not only made many friends from the 
beginning, but it had never forfeited the good-will of any one 
thoroughly familiar with its object and results as an agency for 
the improvement of the condition of the industrial population. 
This view is fully and ably set forth in a lengthy article on the 
Company's business operations during the year 1888, in the 
Baltimore Underwriter of January 21, 1889, from which I make 
a brief extract, as a further proof of the increasing public 
approval of the Prudential form of life insurance in America : — 

While The Prudential is thus showing what can be done by intelligent 
and energetic effort in the upbuilding of a great providential institution, it 
serves at the same time as a leading exponent of a system most admirably 
adapted to the special needs of the industrial classes. It is teaching with 
all the force of a singularly successful example ; it is educating the wage- 
earners of the country to the importance of thrift and the cumulative value 
of small savings ; it shows them how the benefits of life insurance can be 
brought to their own doors, and be made available and secure for them, no 
matter how humble their means or how enforced their economy. Before 
the introduction of the industrial system, the largest class in every com- 
munity, the class more than all others needing the protective care of life 
insurance, was practically denied its advantages. Thousands, through the 
convenient methods and the ready adaptation of The Prudential, have real- 
ized the value of its help in time of need, and they in turn naturally advertise 
it among their friends, and make its name a familiar household word. 

Another clear and comprehensive expression of approval on 
the part of a public journal not connected with insurance inter- 
ests, but which had been among the first to recognize the impor- 
tance of extending the principles of life insurance to the masses, 
is to be found in the Boston Herald of September 2, 1889. From 
along article on the subject of Industrial insurance and "how 
the poor may provide a burial fund," I make the following 
extracts, as a further illustration of the increasing intelligent 
recognition of the methods and results of life insurance on the 
Industrial plan : — 

One of the most surprising developments of modern life insurance is in 
the direction of what is called industrial or burial fund insurance. This 
feature, which is of comparatively recent growth, has been forced upon the 
insurance companies by the necessities of families of small means. Its 
primary object is to provide a modest sum for funeral expenses, and is radi- 
cally different from ordinary life insurance. 

This class of insurance may be called a growth of the times, and 
the increasing demand for it is one of the most encouraging features in the 



THE PRUDENTIAL INS. CO. OF AMERICA, 1889-91. 179 

industrial world at the present time. But a few years ago it was nearly im- 
possible for one to obtain a policy of insurance for less than $1,000. Few 
companies would grant insurance on the lives of women, and no company 
would insure children. Up to the time of the introduction of the plan of 
industrial insurance into this country, the average amount of life insurance 
policies in force in the United States was $2,500. The efforts of most com- 
panies were, and still are directed toward securing large individual risks, and 
the manner in which the heavy risks that have been placed in recent years 
are exploited shows the estimation placed upon this class of business by 
insurance companies. Not only were policies of less than $1,000 seldom 
issued, but premiums were not accepted oftener than quarterly. Naturally 
this high cost of insurance cut off from participation therein those who most 
needed the protection. In fact, the vast majority of the community were 
unable to procure insurance, and would have been unable to pay the pre- 
miums, even if secured. To them, policies for small amounts with fre- 
quent payments of premiums are a necessity. This need was supplied by 
the scheme of industrial insurance, the plan for which has been largely 
drawn from English sources. 

Among the objections that have been raised against industrial insur- 
ance at various times has been that of the temptation to infanticide ; but this 
argument has been so frequently met by official statistics and reports from 
English and American sources, that only the ill-informed now hold or ad- 
vance such theories. The plan early adopted by the companies, and uni- 
formly pursued since, of granting an increasing insurance for a uniform 
period, so that as the child advances in years the benefits increase, reach- 
ing the maximum at about the age when the child becomes a possible 
wage-earner, and thus a contributor to the family funds, has done much to 
lessen any possible danger that might come from this direction. As a mat- 
ter of fact, the cases of infanticide for the sake of insurance money are ex- 
ceedingly rare ; indeed, much more uncommon than similar cases in ordi- 
nary life insurance, where the temptation is greater. 

Another criticism is based on the great number of policies lapsed. The 
critics evidently forget that the conditions are radically different from those 
attending ordinary life insurance. So many things affect the connection of 
the policy-holders with the companies, such as the great variety of ages, 
the small incomes of those who carry the insurance, and the fact that these 
incomes are liable to sudden shrinkage or entire loss. All these causes, 
and many others which might be named, have so much effect upon the 
question that it is not strange that the ratio of lapses should be very 
large. 

Other objections raised are the trifling amount of benefit paid and the 
lack of insurable interest of the parents in the lives of children, who com- 
pose the bulk of the risks exposed. But these objections are answered by 
calling attention to the fact that the benefit is intended to be only of the 
nature of a burial fund, that it is as large as the one carrying the insurance 
can afford to pay premiums upon, and that the desire of a parent to properly 
and decently bury a dead child, without relying either upon public or pri- 
vate charity, may well be a substitute for an insurable interest. 



l8o HISTORY OF THE PRUDENTIAL. 

The dangers which are connected with this plan of insurance, so far as 
the policy-holders are concerned, are largely those which are inseparably con- 
nected with insurance of whatever nature. 

From the little paper printed for The Prudential Insurance Company, 
and from other industrial insurance literature which is accessible, it 
appears that the industrial companies endeavor to minimize the lapses 
as much as possible ; they help the member avoid them by granting 
him a grace, so that every little disturbance may not invalidate his 
insurance, and they make it a vital consideration to the agent to make 
the lapses as small as possible. The idea adopted seems to be that "a busi- 
ness worth doing is worth keeping." A member never secedes, the reve- 
nue from whose policy a company would not far rather have maintained, 
for the lapses" are not on business which has been in force for a few years, 
but upon business in the early stages of its existence before it has covered 
expenses or yielded any margin of surplus. 

Insurance Commissioner Merrill has the following to say of the indus- 
trial business in his report for 1889 : " This branch of life insurance, com- 
paratively new to this country, has had in other lands a development which 
best attests the public want thereby met. That it has its limitations and its 
dangers its most earnest advocates attest, but there is a field within which 
it may properly, and with careful restrictions, commendably work." 

Too much credit can not be awarded to those companies that have, in 
the face of innumerable obstacles, carried the blessings of life insurance to 
the poor and lowly, and made it possible for even the women and children 
to share in the advantages of the indemnity it secures. 

To these words of approval and advice little need be added 
in further explanation. It would be well, indeed, for the best 
interests of the people if public journals would at all times give as 
fair and open an expression, supported by official and other 
proof, of matters affecting directly the interests and welfare of the 
wage-earners of the State ; but, unfortunately, very often sensa- 
tional newspapers will try to discourage public confidence in 
financial institutions by ill-advised criticisms or unwarranted 
assertions. It is something very considerably to the credit of 
the Boston Herald that it maintained consistently its attitude in 
favor of workingmen's insurance for so long a period as from 
1853 to 1889. 

The success of The Prudential was, no doubt, largely respon- 
sible for the organization of a new Industrial insurance company 
in the city of Newark during the year 1889, under the name of 
The United States Industrial Insurance Company. What has 
been said of The People's Insurance Company of Norwich applies 
equally well to this company, which, after struggling against 
enormous difficulties extending over a period of a little more 



THE PRUDENTIAL INS. CO. OF AMERICA, 1889-91. l8l 

than eight years, withdrew from the business and reinsured its 
risks, under date of June 24, 1896, with the Metropolitan Life 
Insurance Company of New York. 

As it was well pointed out at the time, it is not only an ex- 
ceedingly expensive matter to establish an Industrial insurance 
company, but practically an almost impossible undertaking in 
view of the great difficulty in obtaining the required body of men 
able to manage local agencies with even a fair degree of success. 
As a rule, new Industrial companies in the beginning unwisely 
attempted to obtain their agents and managers from the existing 
Industrial companies, who, in turn, would attempt to ''twist" 
policies by transferring business from the older companies to the 
new, this in turn leading to inter-company warfare, which natu- 
rally caused strife and bitterness and unnecessary waste of money, 
to which must be added a not inconsiderable degree of hindrance 
to the development and best interests of the companies and their 
policy-holders. Other companies have been started since that 
date, but, as a rule, their early experience has been very much 
along these lines. Thus, during the same year, an Industrial 
company was organized in Cincinnati by the name of the West- 
ern and Southern, which also, at first, for a short period at least, 
gave considerable trouble to the agents of The Prudential. After 
a while, however, these difficulties were overcome, and the West- 
ern and Southern has now quite a large number of policy-holders 
in some of the principal cities of the Middle West. 

The business operations of The Prudential during the year 
1889 had been exceptionally successful, and at the close of the 
year the Company had 1,099,312 Industrial policies in force for 
the sum of $117,357,415 of insurance protection. The premium 
income during the year had reached the, for the time, enormous 
sum of almost $4,500,000, while the amount paid in losses was 
$1,300,000. The net gain in Industrial insurance during the 
year had been 249,248 Industrial policies, or equal to 29.3 per 
cent, increase over the preceding year. In Ordinary insurance 
the Company had made considerable progress, doubling the 
number of policies, the increase being from 915 in force at the 
close of 1888 to 1,839 i n force at the end of 1889. Corresponding 
gains were made in assets and surplus, indicative of the healthy 
and solid growth of the Company during the year. 

The progress of the Company, in both departments of the 
business, continued during the year 1890. An important step in 



1 82 HISTORY OF THE PRUDENTIAL. 

advance was made during this year, in that a concession was 
granted to the policy-holders by the addition of a five-year divi- 
dend provision to the holders of Special Adult policies. 

In a general way the year was rather an uneventful one from 
an insurance standpoint, and the only matter deserving of more 
than passing notice was an attempt in the State of New York to 
prohibit the insurance of children under ten years of age. A 
bill to this effect had been introduced and referred to the Com- 
mittee on Insurance, which gave an extended hearing to both 
sides of the controversy, and I can not do better than quote 
the following passage in reference to the subject from the Spectator 
of March 13, 1890 : — 

The insurance committee of the Legislature has given a hearing to 
those who are interested in the bill recently introduced to prevent the 
assurance of the lives of children under ten years of age, or what is more 
usually termed infantile assurance. There have been at various times 
attempts made to excite public distrust of this kind of assurance by the 
cry that such assurance is an incentive to child murder. This cry has been 
sounded more frequently, however, in England than here. Inquiries offi- 
cially made in England have shown that there is very little basis for the 
truth of any such statement. While it is possible that occasionally 
depraved and dissolute parents have been led to commit child murder for 
the sake of a small amount of assurance, yet such cases are so rare as to 
amount to nothing when the large number of children so assured is con- 
sidered. We do not believe that in this country it would be possible to 
substantiate a single case of child murder as resulting from this cause. On 
the contrary, however, it could be abundantly shown that infantile assur- 
ance has done a world of good among the poorer classes. Thousands of 
children are assured in the various industrial companies for small amounts, 
and this is regarded in the light of a burial fund, to secure for the child in 
case of its death a decent Christian burial. There is nothing the poor so 
dread as the possibility that they or their children may be buried in Potter's 
Field or by the hand of charity. Next to the poor-house a pauper's grave 
is their greatest aversion. They therefore hail with alacrity this form of 
assurance, which provides a burial fund for themselves and their children, 
and they will pinch and starve themselves, almost, in order to keep this 
assurance alive by the payment of the small weekly sums required. The 
agents of the industrial companies tell many a pitiful tale of the privations 
that poor families endure rather than default in the payment of the pre- 
mium which secures them this fund to save them from a pauper's grave. 
It is so small on the average as to preclude the possibility of its being a 
temptation to them to commit murder, much less a murder of their own 
offspring, but is sufficient to secure Christian burial in case of death. 
President Dryden, of The Prudential Insurance Company of Newark, and 
Vice-President J. R. Hegeman, of the Metropolitan, with others representing 




(L^MM 



THE PRUDENTIAL INS. CO. OF AMERICA, l88c)-'9I. 183 

industrial assurance, have appeared before the committee and given 
such explanations as will probably result in the defeat of the bill. Cer- 
tainly there is no occasion for any such measure, depriving so many 
thousands of this highly-prized form of insurance, until there is some 
evidence that it has been abused, as has been so frequently suggested but 
never proven. 

The Legislative Committee was evidently impressed with the 
plain statement of the facts as presented by the Industrial com- 
panies, and after a full hearing no further action was taken. It 
was only a few years later that complete legislative sanction was 
given to the business by the incorporation of a table into the new 
insurance code of the State, fixing the maximum amounts which 
children under thirteen years could be insured for, in a manner 
practically identical with the methods of The Prudential and 
other Industrial companies. 

During the year an epidemic of la grippe caused an exces- 
sive mortality among the general population and proved a serious 
drain on the funds of the Industrial companies. A large num- 
ber of claims due to this cause were paid by The Prudential, and 
corresponding relief was afforded to large numbers who would 
otherwise have been compelled to rely upon public or private 
support for the payment of medical and funeral expenses. 

A new Industrial company was organized this year at Iyouis- 
ville, Ky . , under the name of the Sun Iyife, by Mr. M. W. Adams, 
formerly connected with The Prudential Insurance Company. 
The new company was, from the beginning, under energetic 
management, and has succeeded in making a success of the busi- 
ness, especially among the white population in the Southern States. 

A vacancy having occurred in the position of Secretary, 
Mr. Forrest F. Dryden, only son of the President of the Com- 
pany, was this year, under date of October 10th, elected to the 
identical position so ably filled by his father from the commence- 
ment of the Company's business operations to the date of his 
election to the Presidency. For the purpose of obtaining a 
thorough training in the field service of the Company, Mr. 
Forrest F. Dryden entered one of the Company's districts as an 
Inspector under date of October 4, 1888, and in the usual course 
obtained his promotion to a Superintendency under date of Feb- 
ruary 4, 1889. Having shown unusual executive ability, Mr. 
Dryden, on January 14, 1890, was advanced to the position of 
Assistant Secretary, and, on October 10, 1890, elected to the 



184 HISTORY OF THE PRUDENTIAL. 

responsible position of Secretary, which, office he holds at the 
present time. 

At the close of the year 1890 The Prudential had 1,228,332 
Industrial policies in force, insuring to the industrial popula- 
tion an amount of protection in excess of $135,000,000. The 
financial condition of the Company was excellent, the surplus 
having been increased to $1,343,874. The relative increase in 
business had been less than during the preceding years, partly 
on account of the continued efforts on the part of new Industrial 
companies to interfere with the business of The Prudential by 
improper methods and unfair competition. These difficulties, 
however, were gradually overcome as the nature of the business 
and the elements of success were becoming more thoroughly 
understood by new organizations entering the field of Industrial 
insurance. 

As an evidence of the efforts on the part of the managers of 
The Prudential to do complete j ustice to their policy-holders, as 
well as to the agents of the Company, a new scale of terms to 
agents was issued during the early part of the year, indicative of 
the most careful consideration of all the interests involved in the 
complex question of adequate agency compensation. The table 
of Industrial rates was slightly altered in that weekly premiums 
in excess of twenty cents were accepted at the older ages, where 
occasionally a demand was made for a policy for a larger sum 
than could be insured for under the existing table of rates. Other- 
wise, the table of rates and benefits remained the same as estab- 
lished in 1887. 

During the year 1891 a number of legislative attempts were 
made to disturb the business of the Company and interfere with 
the practice of Industrial insurance, but, as a rule, the plain 
statement of facts supplied by the companies sufficed to meet 
the objections made against certain details connected with the 
business. Efforts to prohibit the insurance of children were 
made in Illinois, Massachusetts, Ohio and New Jersey, but not 
one of the bills introduced for this purpose became a law. In 
New Jersey a further attempt was made to compel Industrial 
companies to grant surrender values after two years' premiums 
had been paid, while in the State of Illinois a bill was intro- 
duced to compel insurance companies to make their policies 
incontestable after six months. Neither of these efforts met 
with success, the view of the companies prevailing, that should 



THE PRUDENTIAL INS. CO. OF AMERICA, 1889-91. 185 

experience warrant the adoption of such measures the companies, 
for purely commercial reasons, if for no others, would on their 
own account grant such privileges as the condition of the busi- 
ness would warrant. In a few States efforts were made to force 
Industrial companies to grant the same benefits to colored persons 
as those granted to whites, and in the State of New York a 
bill to this effect passed both houses of the Legislature. The 
Spectator of February 5, 1891, in commenting upon the pass- 
age of this bill, well said that " There will probably be less 
effort on the part of agents to write applications on colored 
lives," and further referred to the subject in the following 
well-timed remarks upon the bill during its early stage in the 
Assembly : — 

A bill has been introduced in the New York Senate, having in view the 
prevention of discrimination by life assurance companies against persons of 
color, and is similar in character to that passed by the Ohio and Massachusetts 
Legislatures. Legislation of this kind is harmful in the extreme, because 
it defeats its own end, it being impossible to force any company to make 
a bid through its agents for colored risks, and so those persons, who 
would otherwise be able to secure assurance at rates equitably adjusted to 
the greater mortality which statistics show prevails among individuals of 
African extraction, are practically debarred from its advantages, because no 
agent will solicit them for assurance if his company is compelled to grant 
a contract in which the terms are so manifestly against them. The color 
line is not drawn simply because the applicants are negroes — the world is 
too progressive for that — but a distinction is made on account of the fact that 
companies can not afford to grant policies at the same rates to colored as to 
white applicants, and any legislation which is intended to force them so to 
do is practically tyrannous. Fire insurance companies are not prohibited 
from charging higher premiums on frame than brick or stone-built prop- 
erties, and yet they are in just the same position as life assurance 
companies that adjust the difficulty of increased mortality amongst 
negroes, by fixing a rate at which they can safely, and with equal chance 
of profit as from whites, grant them assurance. There is no more sense 
in passing such a bill as referred to than there would be in passing 
one to prevent life assurance companies rejecting applicants who were 
consumptives. 

The business year of 1891 had been satisfactory to the man- 
agers of The Prudential, showing a fair increase in the Ordinary 
branch, while in the Industrial branch 1,360,000 contracts were 
in force at the close of the year. The Company was taking 
its time in the writing of new business, more serious attention 
being given to the improvement of the condition of the business 



186 HISTORY OF THE PRUDENTIAL. 

already on its books. This, in the practice of Industrial insur- 
ance, is a most important factor and element of success, and no 
Industrial company has shown more solicitude towards its* per- 
sistent policy-holders than The Prudential, and to the Company's 
sense of equity and fairness must be attributed a large degree of 
its wonderful success not only during the early years of business 
operations, but much more so during more recent times. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1892-93. 187 



CHAPTER XII. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1892-1893. 

The new year 1892 was destined to prove a most important 
one in the annals of Industrial insurance. The Prudential Insur- 
ance Company this year issued a new Industrial policy, which 
contained a provision granting paid-up insurance to its policy- 
holders after the premiums had been paid for a period of five 
years. A circular letter to the agents and policy-holders explain- 
ing this voluntary concession on the part of the Company was 
issued under date of January 1, 1892, from which I make a brief 
quotation : — 

The first of our new Plans is the addition of a Paid-up Policy Clause to 
the present forms of Industrial contracts. The paid-up clause will be oper- 
ative after five years' premiums have been paid on the original policy. 
The amount of the paid-up policy at the end of a certain number of years 
is plainly indicated in a table which will be printed on the back of each 
Industrial policy issued after the first of January, 1892. The amounts in 
the table are computed according to the New York Non-forfeiture Law, 
which is used by the New York State companies in computing paid-up 
policies under Ordinary Whole-Life contracts. The paid-up policy, as its 
name indicates, is not subject to the payment of any premiums, and will be 
paid in event of the death of the person insured, provided it occurs within 
the period of his (or her) Expectation of Life at the time the paid-up policy 
is taken out. 

The Company has further to announce that all policies at present out- 
standing will be entitled to a paid-up concession, after five years from this 
date ; or, in other words, whether they contain a paid-up clause or not, will 
be entitled to a paid-up concession. 

In commenting upon the liberal policy of The Prudential, 
the Insurance Monitor ; under date of January 2, 1892, voiced 
the unanimous opinion of the insurance press in the following 
words : — 

The opening of the new year marked an important step in advance in 
industrial insurance. To the Prudential must be given the credit of 



1 88 HISTORY OF THE PRUDENTIAL. 

inaugurating the new departure. Hereafter surrender values in the form 
of paid-up policies will be granted to all applicants above the age of thirteen 
whose contracts have run for five years, such policies to run for the term of 
their life expectation. 

The great importance of this voluntary concession lies in the fact that 
it anticipates and effectually meets what might, in the near future, prove a 
serious menace to the business. Industrial insurance has its stronghold 
among the masses, whose political influence is all powerful. Sooner or later 
a legislative agitation would have been started in the ostensible interest of 
the poor man to compel surrender values. The matter would have been in 
the hands of incompetent legislators, whose notions of surrender values 
would be in all likelihood damaging to the best interests of the business. 
The action of the Prudential will almost inevitably be followed by the rest, 
and there will be no occasion for legislative interference. In fact, since 
writing the above we have learned that the Metropolitan and one or two 
other companies expect to take a similar step. 

But we suggest to all the companies that they act in harmony in this 
matter. Industrial insurance is still in its early stages, and it would be 
exceedingly unwise to inaugurate a competition as to which can promise 
the largest benefits to be piled up as a future liability. 

I can not omit a further tribute to the Company and its liberal 
policy towards its policy-holders, as additional evidence of the 
ready recognition of The Prudential's sense of justice in dealing 
with its patrons, and its sense of prudence in dealing with a 
problem which required for its successful solution and settlement 
not only the highest actuarial skill, but also an experience which 
could be furnished only by the actual business operations of 
the Company. The following reference to The Prudential 
appeared in the American Exchange and Review of April, 1892, 
having been copied from the Philadelphia Intelligencer : — 

It appears to have been a very difficult matter to introduce the feature 
of surrender values in industrial life insurance in this country. In the first 
place, the amounts of the industrial policies are so small that even the 
most liberal allowances as surrender values would be represented by such 
insignificant amounts of paid-up insurance, or for so short extensions to 
the life of lapsed policies as to leave but very little life insurance benefit 
remaining to the assured. But the principal difficulty in this matter, no 
doubt, has been the exceedingly high proportion of cost that must accom- 
pany the granting of surrender values or extensions in industrial life insur- 
ance. The trouble and expense consequent upon extending the time or in 
granting paid-up surrender values on a policy for but $50, generally speak- 
ing, is as great as for a policy of $50,000 ; from this it can be judged that, 
while the ratio of expense attending surrender values, etc., in a business 
of policies for large amounts is hardly appreciable, yet such similar amounts 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93- 189 

of expense attending the granting of surrender values, etc., on the exceed- 
ingly small amounts in industrial insurance, would pretty much swallow 
all up in the cost. Nevertheless, industrial insurance in itself is possibly 
the greatest, as it is the grandest representation of the important results 
that have been obtained by " attention to small things " ; so, on this very 
account, it has looked something like a reproach against the industrial 
life insurance companies that they have not granted surrender values or 
extensions on lapsed policies, no matter how small such paid-up amounts 
or how short the periods of the extension of the life of the policies these 
concessions would result in. However, The Prudential Company of Newark, 
with its twenty years of the largest experience as to the possibilities of 
industrial insurance, has carefully considered the difficulties of granting 
surrender values in this branch of the business, and finding, in its case at 
least, this concession could be made to its patrons, has incorporated it in 
all its policies of five years' standing ; and if this may be considered a long 
time before a surrender value can be earned, nevertheless this action of 
The Prudential is exceedingly valuable as an example that no doubt will be 
influential in bringing about, in the industrial branch, the study and allow- 
ance of all that can be permitted in this important matter, and therefore it 
is due the " Prudential" that it should be given all the credit belonging to 
the industrial company first to introduce the important feature of ' " sur- 
render values ' ' in the industrial life policy. 

Still another decided step in advance was taken this year by 
The Prudential, in that an Industrial Endowment policy was 
placed on the market, reference to which was made in Mr. 
Dry-den' s letter of January 1st, as follows : — 

The second departure is the addition of Endowment Policies to the 
forms of contracts now issued by the Industrial branch of the Company. 
Policies will be issued payable at the end of 15, 20, 25 or 30 years, or at 
death, if prior to the end of the period selected. Circulars are sent you 
herewith, showing the amount of the policy that may be purchased by a 
certain weekly premium. 

Endowments will also be entitled to paid-up policies after five years' 
premiums have been paid. The amount of the paid-up will be in propor- 
tion to the number of premiums paid on the policy. For example, if the 
Endowment is for $1,000 and for 15 years, the paid-up policy after five 
years will be for one-third of the face value of the policy — after ten years, 
for two-thirds of the face of the policy. 

The question of Industrial Endowments had been discussed 
for a number of }'ears in the insurance journals, but it was one 
which required for its proper treatment years of experience. The 
subsequent experience with this class of policies has proven that 
Endowments, in the true sense of the word, and in a practical 



190 HISTORY OF THE PRUDENTIAL. 

form, are hardly possible under trie existing conditions of the 
Industrial method of insurance. In Endowment insurance a 
large part of the premium represents an investment feature, 
which can hardly find a place in an Industrial policy, providing 
first for the payment of funeral expenses and the cost of the last 
illness. The increased cost of Endowment insurance must neces- 
sarily at all times prove a serious hindrance to success, while, on 
the other hand, it may be argued that it is not desirable that 
the primary purpose of Industrial insurance should be defeated 
by a secondary one, which would often be the case were the 
amounts receivable to be paid to the insured during his or her 
life- time, and which, being small, would rapidly be consumed for 
living expenses, leaving little or nothing at death to meet the 
cost of burial and last illness. 

Immense and permanent progress had been made in the ex- 
tension of insurance principles to the masses. Millions were now 
insured who, previous to the advent of Industrial insurance, had 
not even a conception of insurance principles and practice, and 
millions had been provided for by a policy adequate to meet the 
objects for which the business had been established. 

Few writers on Life Insurance Progress have recognized this 
development of life insurance more clearly than Mr. D.N. Holway, 
who, in an article in the Arena of 1892, referred to Industrial 
insurance as follows : — 

It forms the A, B, C of American Life Insurance. All the members 
of a family insure each for a small amount secured by weekly payments. 
In this way they mutually protect each other. The amount of death 
claims paid under this form of insurance in 1891 was $7,725,000 upon 
63,900 policies. Aside from the direct and incalculable benefit which 
the bestowal of this large amount among so many households afforded, the 
educational process whereby this vast number of people (over 4,000,000) are 
taught the value of self-sacrifice for the benefit of others, and to fully real- 
ize that there is a system whereby they can surely do it, is of immeasurable 
value to the future of the republic. Instead of being a blind force of un- 
educated power, they become conservatives because they represent prop- 
erty.* They range themselves on the side of law and order. To many of 
them is thus exemplified for the first time the beautiful sentiment that 



* It may not be out of place here to recall a passage in Mr. Mackay's 
book, "The English Poor," in which this tendency of the wage-earning 
masses towards economic independence is fully and ably set forth: "The 
first lesson in thrift, the first inducements to rely on property, the first 




PRESENT HOME-OFFICE BUILDINGS OF 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

FIRST OCCUPIED, MAY I, 1892. 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93. 191 

has come down the centuries, "Bear ye one another's burdens," and they 
find pleasure in expressing it in this practical way. As these persons rise 
in the social scale and become supervisors, inventors and proprietors in the 
world's great affairs, they will increase their insurance, and thus become 
patrons in an enlightened sense of the companies which practice the ordi- 
nary methods. There is therefore no clashing of interests between the 
two plans of conducting the business, but rather a mutual helping of each 
other forward toward an ever enlarging success. 

Largely no doubt in consequence of the liberal concessions 
made to its policy-holders and the consequent material improve- 
ment in the Industrial contract as a permanent form of insurance 
protection, The Prudential made exceptional progress in new- 
business during the year 1 892. The net increase in Industrial poli- 
cies in force reached almost 300,000, equal to 21.6 per cent, over 
the preceding year. The total number of Industrial policies had 
reached 1,653,465, while in the Ordinary department 8, 120 policies 
were in force. In the finances of the Company corresponding 
progress had been made, and the surplus to policy-holders now ex- 
ceeded $2,200,000. The successful ending of the year's business 
operations proved a fitting climax to the removal of the home 
office from the building which it had occupied since 1883 to the 
new home-ofiice building on the corner of Broad and Bank streets. 
Unknown as a business method less than seventeen years before, 
The Prudential had developed Industrial insurance to such an 
extent that by 1892 the largest office building in the State of 
New Jersey was required for transacting the business of the 
Company. In honor of the event a celebration took place during 
the latter part of November, referred to in the Standard of Boston, 
under date of December 3, 1892, in the following words : — 

The Prudential L,ife Insurance Company of Newark gave a treat to its 
agents located within a radius of 100 miles of the home office Thursday and 
Friday. The affair was in the nature of a house-warming, the first since 



motives to refrain from consuming wages on the day they are earned, arise 
from the desire of men to provide against the uncertainties of an unknown 
morrow, and for the inevitable period of sickness and old age. Our poor 
law and the ubiquitous philanthropist have done their best to prevent the 
poor man from the necessity of yielding to this desire. * * * * But 
the individualistic instinct is not so easily killed, and notwithstanding the 
snare, there is among the poor a latent, steady and withal effectual tendency 
to return to the true type of individual independence and self-assertion." 
(P- I3-) 



192 HISTORY OF THE PRUDENTIAL. 

the Company's building on Broad street had been occupied. The festivities 
were inaugurated with a banquet at Delmonico's Thursday night, at which 
all the officers and their immediate attaches participated. 

The influx of agents did not begin from the suburban districts until 
yesterday morning, and by 11 o'clock there were fully two thousand sta- 
tioned in front of the Broad street edifice, having been brought to the city 
by the early trains. The insurance excursionists were primed for a good 
time, having fine military bands with them that served to arouse all Newark 
within a distance of three miles of the Prudential office. After an inspec- 
tion of the building, during which President Dryden addressed the visitors 
from the monster balcony within that overlooks the entire office on the 
ground-floor, the agents were ordered to fall in and the march was taken 
up to Saenger-Fest Pavilion in Caledonian Park. On the way they were 
reviewed by Mayor Haynes. The agents sat down to an elaborate ox-roast 
on reaching their destination. Another speech was made by President 
Dryden at the park after the repast, and the delegates returned to their 
homes in the evening pronouncing the affair a monster success. 

The proportions which the business of The Prudential had 
assumed by January 1, 1893, made it not only desirable but 
necessary that the capital stock of the Company should be con- 
siderably increased. Accordingly during the early part of the 
year new stock was issued, which increased the capital of the 
Company to $2,000,000. 

In compliance with a distinct demand the Company this year 
through its Ordinary department placed a Child's Endowment 
policy on the market, to enable parents to make a provision for 
the education, support or assistance of children at the age of 
eighteen years and over. Similar efforts had previously been 
made in this direction in this country, but no substantial results 
had been attained. As far back as 1853, Dr. E. J. Tilt had 
discussed the question of life insurance for children at consider- 
able length and furnished tables of rates which, no doubt, were 
adopted by some of the companies transacting insurance at that 
time,* but the inherent difficulties in making Child's Endowments 
applicable to the Industrial population are such that it is doubtful 
whether this form of insurance is ever likely to become very 
popular in this country. The Child Endowment policies of The 
Prudential are issued for sums as low as $100, with premiums 
payable quarterly, semi-annually and annually. 



* Elements of Health, and Principles of Female Hygiene, pp. 134, 135. 
Lindsay & Blakiston, Philadelphia, 1853. 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93- 193 

CHILD'S ENDOWMENT. (With Interest.) 

Premium Rates per $100. 

Amount of Policy with profits payable at age stated, and all Premiums 
returned With Four Per Cent. Compound Interest in event of 
previous death. 

Payable at Age 18. 



Age Nearest 










Birthday. 


Annual. 


Semi-Annual. 


Quarterly. 




I 


$5 08 


$2 64 


$1 35 




2 


5 49 


2 85 


1 46 




3 


5 96 


3 10 


1 58 




4 


6 50 


3 38 


1 72 




5 


7 12 


3 7o 


1 89 




6 


7 85 


4 08 


2 08 




7 


8 71 


4 53 


2 31 




8 


9 75 


5 07 


2 58 





In the event of the death of the child before the expiration of the 
Endowment period, all the premiums paid on the policy are returned to 
the parent or guardian with compound interest at the rate of four per cent. 



In compliance with a request from the United States Review 
of Philadelphia, Mr. Dryden this year contributed a valuable 
and interesting paper on " Industrial Insurance as an Educator." 
The article is too long to be reproduced in full, but the essential 
points are brought out in the following quotations : — 

Industrial insurance does not cease its efforts for the education of the 
people at the time when the policy is taken, for it must be remembered 
that the premium is not sent to the Company by the insured, but that the 
agent calls at the house of the policy-holder week after week. This tends to 
keep the subject before the mind, and very frequently questions are asked 
and the subject is broached by neighbors who are calling at the time the 
collector is announced, and, moreover, the literature of the Company is 
left regularly as the agent calls, so that the person is kept informed in 
regard to the various phases of life insurance, the different arguments for 
it, illustrations of its value, and also of the disadvantages of being without 
it ; so that the tendency is to continually deepen the impression which was 
made at the time the policy was taken. 

One feature of this work merits particular attention, namely, its effect 
upon the young. In consequence of the industrial agent's work, boys and 
girls grow up in an atmosphere of insurance. They come to look upon it 



194 HISTORY OF THE PRUDENTIAL. 

as a matter of course ; to think of it as something to be provided, the same 
as every other necessary of life, regularly and constantly. They hear the 
subject discussed by their parents after the agent has called ; they know 
when a decision is reached and in many cases understand that it involves 
self-denial, and they appreciate its importance accordingly. They see the 
policy and premium receipt-book and know what they are ; and they see 
the money paid out. In answer to innumerable questions the parents 
explain to them the reasons for the outlay and the advantages of it ; and 
this is done, not in the parlance of the agent, but in the language of the 
parent, which is the expression of a mode of thought very little different 
or but slightly removed from that of the child. Thus, the boy or girl 
involuntarily and intuitively imbibes insurance. 

It may be said that this process of education is confined to a certain 
class, and that it is circumscribed in its influence ; that it works amongst 
those whose surroundings, mode of life and limited sphere in which they 
move make it impracticable, if not impossible, for them to do much 
towards extending the education thus gained. This is not the country in 
which to hold such a theory. It is here that the poor boy of to-day becomes 
the millionaire of a few years hence ; that the cabin of the canal-boat is 
exchanged for the White House, and the rail-splitter becomes President. 
The history of this country teaches, as clearly as anything else, that the 
masses amongst which the work of Industrial insurance is done produce 
many men who are a power in society. There are boys who are now in 
families where industrial policies are held, some of them carrying insurance 
on their own lives, who are fast approaching the editorial chair, and it will 
not be very long before some of those who are now taking their first lesson 
in insurance from an industrial policy and premium receipt-book, will be 
seated in the State Legislatures or in the halls of Congress. 

This view of Mr. Dryden is fully supported by the increasing 
popularity of the system of Industrial insurance among the 
new generation who have become familiar with this form of 
insurance during their earliest infancy, and perhaps in no case 
has the educational value of Industrial insurance been more 
fully recognized than in the article of Mr. Hoi way in the Arena, 
where he properly refers to it as the "A, B, C" of American 
life insurance. 

These views found their further support in the very con- 
siderable progress that had been made by Industrial companies 
in the Ordinary field. The larger proportion of Ordinary risks 
on the books of Industrial companies represent a class of people 
who would not generally be solicited by the agents of regular 
Ordinary companies. To illustrate this fact I may state that 
the average amount of an Ordinary policy written by the three 
leading Ordinary life companies during 1898 was $2, 138 against an 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93. 195 

average policy of only $1,120 written by The Prudential in its 
Ordinary department. That this extension of Ordinary insurance 
principles to the masses is the direct result of Industrial insurance 
will not be questioned by any experienced life underwriter. 

The commercial and financial depression of the year 1893 
brought about such widespread distress among the wage-earning 
population in consequence of the numerous failures and the stop- 
page of work in a large number of industries that it was but natural 
to expect that, among those insured with Industrial companies, 
many would find it difficult to pay the weekly premiums on their 
Industrial policies. As soon as the gravity of the problem 
became apparent, steps were taken by The Prudential to miti- 
gate the inevitable distress as far as it was possible for the 
Company to do this in justice to the best interests of all the 
policy-holders and the future welfare of the Company. Accord- 
ingly, under date of November 1, 1893, a circular letter was issued 
by the Company over the signature of Mr. Dry den, in which lapsed 
policy-holders were granted concessions without a parallel in life- 
insurance history. The circular letter is referred to at length in 
an article, in which the most important sections were incorporated, 
in the Baltimore Underwriter under date of November 20, 1893, 
and which I therefore quote in full : — 

Under the operation of the forfeiture system in case of lapses of policies 
for non-punctual payment of premiums, so much hardship was occasioned, 
that the life companies -were forced by public complaint to adopt more 
liberal measures. Enforcement of the stipulations of an iron-clad contract, 
though strictly legal, was not considered by the sufferers as even-handed 
or equitable. It might be just, but it was anything but generous. Hence 
the non-forfeiture features which have been conceded from time to time, 
and which have abolished the provisions and restrictions to which reason- 
able objection was made. 

In line with this growth of liberal spirit, and in view of the straitened 
and pinched condition of the great army of the unemployed during a long 
period of financial stringency, of closure of mills and factories, and of 
strikes against reduction of wages, The Prudential Insurance Company of 
America has issued a very important and noteworthy circular, a copy of 
which will be found on another page. The constituency of industrial in- 
surance is mainly drawn from the humble classes of life, to whom in a 
period of non-employment the payment of five or ten cents a week out of 
slender savings may mean serious privation. When the savings are ex- 
hausted and no wages coming in, they are obliged to lapse their policies, 
and lose thereby the provision made for the rainy day. With the experi- 
ence before them of such sad results of hard times, the managers of the 



196 HISTORY OF THE PRUDENTIAL. 

Prudential have come forward to befriend distressed policy-holders in the 
most effective way. Three concessions are made as follows : — 

1. If the policy has been in force as an "adult policy " for five years or 
more at the time premiums ceased to be paid, a paid-up policy will be 
granted in accordance with the terms and conditions of the provision for 
paid-up policies published on the back of " regular industrial " policies now 
issued by the company. 

2. In lieu of the foregoing, policy-holders who have paid premiums for 
one full year or more at the time of lapse may take out a new policy at 
the present age, and the same will be put in full immediate benefit. 

3. Proofs of death may be filled out and submitted in the usual way in 
any case of death happening between June 1st last and November 6, 1893, 
if policy has been in force for five years or more on the life of the insured 
and has been lapsed since June 1st last, in consequence of the hard times. 
If the claim is correct in every respect, except with regard to the policy 
being lapsed for the cause aforesaid, it will be recognized and paid in ac- 
cordance with the terms and conditions of the provision for paid-up policies 
heretofore referred to. 

These offers of restoration will not only be welcome to the thrifty on 
the lapse list, who can ill afford to lose what they have paid in, and who 
feel keenly such deprivation of the provision against future contingen- 
cies, but they will be hailed with satisfaction by all who are interested 
in the successful working of the industrial insurance system, which they 
regard as virtually and substantially the best form of " organized charity " 
yet devised. Not the least in gratitude to the managers will be the field 
workers, for the double reason that it will give them especial pleasure to 
engage in the work of restoration, and that it will give them a handle and im- 
petus in canvassing for new business, the value of which is beyond estimate. 

The value of these important concessions can not be esti- 
mated in mere dollars and cents. It far exceeds the actual 
cost of these concessions to the Company which was liberal 
enough to make them, for they have done much, if not most, to 
make clear to policy-holders and the outside world that, although 
The Prudential is not a charitable or philanthropic agency in the 
sense that these terms are usually understood, it is nevertheless 
a Company ready to deal liberally and equitably with its policy- 
holders to the extent of its ability in an hour of emergency or 
need. It would be easy to fill pages with letters of gratitude 
which reached the Company in large numbers, expressing the 
appreciation of those who, contrary to their expectations, did not 
forfeit their insurance in consequence of the critical times during 
the latter part of 1893 and the early part of 1894. 

I can not do better than quote from the New York Insur- 
ance Journal for November, 1893, tne statement that — "When 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93. 197 

we consider the magnitude of the concession, which may embrace 
many thousand policy holders, so widespread is what we may 
term industrial idleness, that the proposition may be well de- 
scribed as unexampled in the history of life insurance, and 
probably reaches that extreme of security that is compatible 
with the fundamental principle upon which the institution is 
founded, that of reproductiveness and self-support. But under the 
pressure of such circumstances, and in behalf of such a clientele, 
we question if sentiment would be open to reproach should it be 
found to have made a slight trespass upon actual foresight." 

At the time when the concession was made the Company 
hardly expected the financial stringency to continue as long as 
subsequent experience proved to be the case, and hence an ex- 
tension of the concession was made necessary under date of 
December 10th, and communicated to the public and the field 
force in the following words : — 

The first of the concessions of November 1, 1893, gave to the holders of 
Adult policies on which the premiums had been paid for five or more years 
the privilege of applying for a Paid-up policy, in accordance with the terms 
and conditions of the provision for Paid-up policies printed on the back of 
the present Regular Industrial policies of the Company. Until further 
notice this concession will be continued by the Company. 

If ever an unwarranted charge had found its own refutation 
it was true in this case. The accusation which had so often been 
brought against Industrial insurance companies, namely, that they 
desired, encouraged and profited by lapses, was here disproved by 
the practice of The Prudential, which did all that in safety could 
be done to reinstate lapsed policy-holders and to make forfeitures, 
which could possibly be avoided, unnecessary by a prudent 
liberality. This view was so well expressed in an article in the 
Weekly Underwriter of November 11, 1893, that I can not do 
better than conclude these references to the concessions of 1893 
with the following quotation : — 

No business can long endure which takes advantage of technicalities 
to grind the face of the poor. While life insurance can not be conducted 
without premiums, and while rules must be maintained which are known to 
be sound business rules in ordinary times, there are exigencies in the lives 
of individuals and corporations, when the highest regard for the welfare 
of each demands a temporary departure even from principles which are 
regarded as fundamental. Insurance companies do not thrive on the profits 
from lapsed policies, as many ignorant people suppose, but on the steady 
and long-continued payment of premiums. This is especially true of 



198 HISTORY OF THE PRUDENTIAL. 

industrial insurance, where it takes years of hard work to build up a pay- 
ing business. 

It must be apparent to the careful student of Industrial 
insurance history that, from the date of the organization of The 
Prudential, Industrial insurance had not only made constant and 
material progress in the extension of its operations, but that 
there had also been a corresponding increase in the public 
appreciation of its beneficence, not only from the standpoint of 
the individual policy-holder, but also from the standpoint of the 
taxpayer and citizen interested in the diminution of public 
burdens. It is rather curious to observe that, in the face of these 
facts, attempts continued to be made to interfere with the legiti- 
mate functions of the business. While some of the most impor- 
tant attempts at adverse legislation have been referred to, others 
were made in different parts of the country, which, however, as 
a rule, proved equally unsuccessful. Wherever the business was 
widely known, as in New Jersey, New York, Pennsylvania or 
Massachusetts, it was naturally only a question of publicity 
and argument to make clear the absurdity and iniquity of the 
unfounded charges against the business. A successful attempt 
at adverse legislation was made this year in a western State, 
where The Prudential had only recently commenced business 
operations, and where, therefore, an extended knowledge of the 
true objects and results of Industrial insurance was out of the 
question. A bill was introduced in the Colorado legislature 
during the early part of 1893, at the suggestion of the Colorado 
Humane Society, to prohibit the insurance of children under 
ten years of age. 

A brief hearing was given before the Insurance Committee 
of the Legislature, and in response to a request for information, 
with special reference to the question of insurable interest, 
the following facts and comments were placed before the Com- 
mittee* : — 

It may be asserted that a parent has no insurable interest in the life of 
a child. We contend that the industrial classes have the moral and legal 

* An interesting case bearing on this point was tried in Anderson, Ind., 
a few years ago, in which the value of a child's life, its earning capacity, 
etc., were brought to the attention of the jury in a suit for damages for 
fatal injuries. According to the court records the value of a child's life, 
at age four, was given as #149.50; at age seven, as $600 ; at age ten, as 
$980 ; at age fifteen, as $2,600 ; and finally at age eighteen, as $4,200. 



THE PRUDENTIAL INS. CO. OF AMERICA, l892-'93- 199 

right to insure their children, for it is well known that these children con- 
tribute to the support of their families at very early ages, so early, in fact, 
that in New York, Connecticut, and other States laws have been passed 
making thirteen the minimum age at which children should be employed 
in manufacturing establishments. Meanwhile, they are supported, edu- 
cated, and taught a trade in that view. 

There is a just and reasonable expectation of advantage or benefit from 
the continuance of their lives, and it logically follows that a proper justifi- 
cation inheres in the parent to protect that benefit while his child is insura- 
ble, and before sickness, accident or other causes interpose. 

As to its legality, the highest tribunal in the land, the Supreme Court of 
the United States, has gone farther than is here indicated by announcing that 
11 it is not necessary that the expectation of advantage or benefit should be 
always capable of pecuniary estimation, for a parent has an insurable inter- 
est in the life of his child, a child in the life of his parent, a husband in the 
life of his wife, and the wife in the life of her husband." 

In Warnock vs. Davis, U. S. S. C, it was held that " the natural affec- 
tion in cases of this kind is considered as more powerful, as operating more 
efficaciously to protect the life of the insured than any other consideration." 

Again, in re Phoenix Life Company vs. Bailey, U. S. S. C, it was held 
that " there is an insurable interest if it appears that the relation, when of 
consanguinity or of affinity, was such as between the person whose life was 
insured and the benefit named in the policy as warrants the conclusion that 
the beneficiary had an interest, whether pecuniary or arising from depend- 
ence or natural affection, in the life of the person insured." 

Unfortunately for the best interests of the people, the bill 
was permitted to become a law. Those who were most interested, 
in its passage had no opportunity to express themselves and had 
no means whereby they could make public their views. It is true 
that the Insurance Department of the State expressed itself in 
favor of Industrial insurance, it is true that a number of the 
more intelligent and influential members of the Legislature argued 
fully the people's side of the case, but the fact that the business 
was new, that it was represented in only two or three counties of 
the State, and that the majority of the members were absolutely 
unfamiliar with the subject, outweighed the argument in favor of 
the companies' side of the case. How far the members of the 
Legislature were misled by foolish and absolutely untrue state- 
ments on the part of those who were not in favor of the bill is 
best illustrated by an article in the Denver Times, from which I 
quote the following passage : — 

The system has been driven out of almost every city in the Union 
where it attempted to do business, and has drawn upon itself the sworn 



200 HISTORY OF THE PRUDENTIAL. 

hostility of societies for the prevention of cruelty to children, since it has 
proved to be the cause of much abuse to youths of tender age. Not a word 
can be said in its favor, and much can be charged to its account as an open 
avenue to fraud and crime.* 



The system had not only not been driven out of a single city 
in the United States, it had not only never been prohibited in 
this country or in England, but, on the contrary, it had been 
rapidly extended into all parts of the country, into Canada, into 
Australia and even into the Cape Colony of South Africa. Wher- 
ever the English people are developing industrial communities, 
this form of insurance, either in the form of Friendly Societies 
or of Industrial companies, is rapidly increasing in popularity 
and public appreciation. There was therefore no warrant for 
the statements made by the Denver Times, and they can only 
be explained as having been put forward for partisan reasons. 
Once on the statute book, the Colorado law naturally became 
very difficult of repeal, and, though an effort in this direction 
was made during the session of 1899, to which reference will 
be made further on, the attempt failed because of the work of 
a small minority, who once more had neither public opinion nor 
a single iota of fact to support their antagonism to the business. 

A very interesting and valuable contribution to life-insur- 
ance literature was made this year by Dr. Edward H. Hamill, 
the Medical Director of the Company, who, at the Insurance 
Congress of the Chicago World's Fair, read a paper entitled 
1 ' Observations Regarding Risks Declined by The Prudential 
Insurance Company of America, i888-'92." By an entirely 
novel and original method, Dr. Hamill had succeeded in keep- 
ing a record of the mortality of rejected lives in the Industrial 
department of the Company's business, and for the first time in 
life-insurance history actual information pertaining to this class 



* A still more pertinent illustration of the perversion of facts pertaining 
to the business of Industrial insurance, on the part of those who are op- 
posed to the insurance of children, is to be found in the Seventeenth Annual 
Report of the American Humane Association, where it is stated that The 
Prudential Insurance Company had children insured in Colorado for sums 
as high as $25,000. As a matter of fact the Company had not then and has 
not now a single policy in force, on a child under ten years of age, for one- 
hundredth part of the sum mentioned. 



THE PRUDENTIAL INS. CO. OF AMERICA, iSo^-'o^. 201 

of risks was supplied for a number of cases large enough to 
warrant the conclusion that the medical examination of Indus- 
trial risks was sufficiently accurate and satisfactory to protect 
the best interests of the Company. The Prudential Insurance 
Company is the only life company in existence collecting infor- 
mation of this kind, and the investigation having been con- 
tinued, the data are now much more complete and of greater 
determining value. 



203 HISTORY OF THE PRUDENTIAL, 



CHAPTER XIII. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1894-1896. 

During the early part of 1894 The Prudential Insurance 
Company made an important change in its Industrial contracts, 
as to the amount of benefit payable during the first few months 
of policy duration. It had been the early practice of the 
Company to grant full benefit under Industrial policies after a 
period of three months of policy duration, but in 1877 this prac- 
tice was changed and the benefit was made one-quarter of the 
total amount of insurance when the policy had been less than 
six months in force. Subsequent experience proved that this 
provision was somewhat too liberal, largely because of the fact 
that a considerable amount of adverse selection was possible 
under the rules of the Company, by which at that time no 
medical examination or inspection was required on policies for 
less than $200. Accordingly, under date of October 6, 1884, a 
further change was made and no benefit was payable during the 
first three months of policy duration ; in other words, if the 
policy-holder died during the first three months, nothing was to 
be paid by the Company. After a little more than ten years' 
experience, it was once more decided to make a change by pro- 
viding a more liberal feature, and this year (1894) a provision 
was incorporated in the Industrial policy by which only one- 
third of the total amount of insurance insured for under the 
policy was payable if death occurred during the first six months 
of policy duration. This concession of an immediate benefit 
was a decided step in advance, since hardship often resulted 
in cases where death occurred during the early period of policy 
duration. 

Due largely, no doubt, to the many liberal concessions which 
had been made by the Company to its policy-holders, the year 
1894 proved to be the greatest business year in the Company's 



THE PRUDENTIAL INS. CO. OF AMERICA, 1894-96. 203 

history. In consequence of the after effects of the panic of 1893, 
an increased proportion of the industrial population was forced to 
consider more seriously the question of a small life-insurance pro- 
vision against contingencies likely to occur at any time. Private 
charity, ever ready to help, assist and ameliorate the condition of 
unfortunates at the hour of death, is naturally very much re- 
stricted during years of panic and widespread financial or 
industrial depression. Hence, during 1894 large numbers who 
would otherwise have relied upon private charity or public sup- 
port realized the necessity of individual provision by life-insur- 
ance methods against the contingency of death, the expenses of 
the last illness and the immediate support of dependents. It 
had well been said by the Spectator, under date of March 22, 
1894, that "The more the view of the Industrial companies 
being charitable organizations is advanced, the less likely are 
many people to take out policies ; for they would not accept 
charity and would resent the appearance of the agents if they 
had the wrong idea of the business. ' ' Neither The Prudential 
nor any other Industrial company ever attempted to create the 
impression among the industrial population that Industrial com- 
panies were charitable institutions. Rather to the contrary, the 
agents of the Company had, from the very beginning, preached 
thrift and independence to those with whom they came in contact 
in the discharge of their regular duties as canvassers and collectors. 
It is to these causes that I would attribute the immense suc- 
cess of the Company during the year 1894, when under ordinary 
conditions a decrease in business should have been expected rather 
than an increase. In the Industrial department during the year 
1894, The Prudential issued 1,696,847 policies for an aggregate 
sum of $205,128,000, while in the Ordinary department 12,245 
new policies were issued for an aggregate amount of $13,873,000 
of life-insurance protection. The results attained in the Indus- 
trial department were so far out of proportion to what had pre- 
viously been achieved that it is doubtful whether the record of 
1894 will be exceeded during any business year in the near 
future. This view of the success of 1894 is brought out in a dis- 
cussion on the outlook for the year in the Spectator of January 
n, 1894, from which I quote as follows : — 

The statements of the various industrial companies will be published 
in a short time now, and then it will be seen what remarkable progress, in 



204 HISTORY OF THE PRUDENTIAL. 

face of the prevailing depression, has been made. And this brings us to a 
point on which it is right to dwell a little. The history of industrial insur- 
ance in Great Britain shows conclusively that in time of stringency, when 
the outlook of the people who had to depend on their day's earnings to 
supply the day's needs was unfavorable, the companies made large increases. 
The reason for this is obvious to the thinker, the agents' field of operation 
in certain lines was narrowed because they could not get money where 
money was not, and so they canvassed the class of people who were less 
affected by the hard times, and there found their opportunity. The lessons 
of the times had been impressed on the minds of the public ; those who in 
the season of prosperity turned a deaf ear to the agent's entreaties saw 
instances every day where the life insurance would have remedied the 
trouble brought on families by the death of some one who contributed to 
the funds of the household, and when the agent called again his argument 
had more telling effect. This is the first time since the inception of the 
business here that those interested have had to deal with financial panics of 
magnitude, and it is to be hoped that a very long period will elapse before 
a like experience is forced upon us. The field men have discovered their 
opportunities for doing effective work now, and the extraordinary volumes 
of business turned in of late indicate the possibilities of the present year 
if labors be rightly directed and continued. 

Another element of considerable importance in making for 
the increasing growth and prosperity of the Company was, no 
doubt, the publication, during the early part of the year, of the 
report of the Commissioner of Banking and Insurance of the 
State of New Jersey on the financial and general condition of 
the Company. Without going into the details of this report, I 
confine my remarks to a brief reference to the subject as pub- 
lished in one of the Newark (N. J.) newspapers during 1894: — 

It will be seen that the Commissioner endorses unqualifiedly the 
methods of The Prudential. This could not be otherwise, for the business 
has always been conducted in such a way as to merit the approval of all 
who have known anything about it. Not only so, but the Company's deal- 
ings with its policy-holders have been more than fair. It has been liberal 
in the extreme, as was shown both last November, when it made such 
liberal concessions to its policy-holders who had been compelled to cease 
paying their premiums, and also in January of the present year, when it 
introduced several new features, every one of which was of great advantage 
to the insured. The amount of good which this Company has done can not 
be indicated in any report and, in fact, it is almost impossible to ascertain 
what it has accomplished unless one should be able to interview every one 
to whom a claim has been paid. In this way a mass of testimony to the 
advantages obtained by Prudential policy-holders would be secured which 
would fill volumes. 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 205 

Still another powerful factor influencing public opinion is 
to be found in the publication this year of a special report of the 
Deputy Superintendent of Insurance of the State of New York, 
on his examination of another great Industrial company, the 
Metropolitan I^ife Insurance Company, of New York. Mr. 
Michael Shannon, as Deputy Superintendent of Insurance, made 
special reference to three important aspects of the practice of 
Industrial companies, and from the report I quote, first, his views 
as to the expense-rate in Industrial insurance : — 

It may not be inappropriate for me to allude, as a plain matter of jus- 
tice to this business, to the fact that industrial insurance being, as before 
said, distinctive and essentially unlike in practice that of the other life- 
insurance companies, ratios and comparisons based upon the records of the 
latter may be deceptive and misleading. It is obvious, for example, that in 
the matter of expense no just comparison is possible. In the ordinary 
companies the premiums are due once, twice, or four times a year, and a 
large proportion of them, in answer to notices, is sent by the assured direct 
to the company, or to its local office or agent. Under the industrial plan 
the premiums are invariably called for, by the agent, at the expense of the 
company, fifty-two times a year, and even more frequently, When death 
occurs, the proofs are prepared by the company's representative at the 
company's cost, and the proceeds of policies are taken in the same way to 
the beneficiary. In these, as in all its features, the difference is as obvious 
as between any wholesale and retail business. The multiplication of ma- 
chinery here means the multiplication of expense, and that expense falls 
to the company. 

To these remarks on the vexed and complex question of the 
management expenses of the business, I add the following re- 
marks from Mr. Shannon's report in regard to lapses : — 

Criticism is sometimes thoughtlessly or ignorantly made in the matter 
of lapses. Why do so many withdraw ? Investigation shows that lapses in 
this form of insurance are of quite a different nature from those in the or- 
dinary lines. When a policy-holder withdraws from a [Ordinary] company, 
usually he stays out permanently. He takes his paid-up policy, or his sur- 
render value, or forfeits his insurance altogether, as the case may be, and 
that ends the relation. But a vast proportion of those who lapse in the in- 
dustrial come back. Numberless causes conspire to force them out, such as 
wide-spread commercial depression, the shutting down of mills and factories, 
the failure of employers, strikes and other labor disturbances, and enforced 
idleness from various causes. When they resume work they revive their 
policies, which they can do within a year, or apply for new ones. Thus 
they come and go ; thus the process repeats itself. Nor will the fact be 
overlooked that the opportunity to lapse occurs once, twice, and at the 



206 HISTORY OF THE PRUDENTIAL. 

most four times a year, in the ordinary companies, while the occasion pre- 
sents itself fifty-two times a year in the industrial. 

To this straightforward statement of another complex aspect 
of the business of Industrial insurance, Mr. Shannon added the 
weight of his official opinion in reference to the expediency of 
insuring the lives of children, which I quote in full as follows : — 

Still another reference to which I deem it almost unnecessary to allude, 
and which I do only to give this report the utmost comprehensiveness. I 
allude to the imputation (occasionally put forth by those who can not have 
given the records of the business any investigation) that the embracing of 
small infantile insurances in the industrial plan is subversive of public 
policy — in brief, that it leans toward possible infanticide. This is a mon- 
strous charge that no person should make without proof. The facts are 
that the proportion of infantile claims paid during the last year was but 
4.3 per cent, of the total amount. This matter has been before the legis- 
latures of various states, and before numerous humane societies. Com- 
mittees have been appointed to investigate. Searching and exhaustive in- 
quiries have been made, and in no single instance has the imputation been 
sustained. Carefully collated statistics prove that the mortality among the 
insured minors is less than the mortality of the general infantile population. 
Out of more than twenty millions of industrial policies issued in this coun- 
try, but one case coming under this indictment has occurred, and that was 
the instance of a mother who did away with all her family, including the 
husband upon whose life she depended for support ! That was manifest 
insanity. 

Across the water professional agitators have, from time to time, influ- 
enced parliamentary investigations, but in every instance the conclusion has 
been that no legislation or other interference was in any wise necessary or 
expedient. The State of New York has put its seal upon this matter by 
specifically providing for the business of infantile insurance in its insurance 
code. Like action has been taken in the Dominion of Canada. 



Mr. Shannon's remarks with reference to the expense-rate, 
the lapse-rate and the insurance of children are fully applicable 
to The Prudential Insurance Company, as well as to all other com- 
panies transacting an Industrial business. Where such unanimity 
of unqualified official opinion prevails, it would seem little short of 
criminal indifference on the part of those unfamiliar with the 
practice and results of Industrial insurance to continue in attempts 
to interfere with the business in one respect or another. 

The efforts in opposition to Industrial insurance may be 
divided into three distinct groups : first, those relating to the 



THE PRUDENTIAL INS. CO. OF AMERICA, 1894- 96. 207 

discrimination made against negroes, in granting to them only 
two-thirds of the benefits granted to white policy-holders ; second, 
those relating to the practice of the companies in accepting small 
risks on the lives of children for burial purposes and the cost of 
the last illness ; third, those relating to miscellaneous matters 
dealing with the practice of the companies as regards lapses, sur- 
render values, immediate benefits, etc. 

The opposition to the companies' practice as regards discrimi- 
nation against negroes originated partly with the sentimental ele- 
ment of the population, acting on the unwarranted assumption 
that the companies made this distinction on account of color 
prejudice, when, as a matter of fact, the distinction was based 
solely on the observed difference in mortality between the two 
races, pointing to an inordinate disease prevalence and an exces- 
sive death-rate among the colored population. 

As regards the practice of insuring the lives of children, pro- 
hibitive measures had, almost without exception, been introduced 
at the instance of individuals connected with societies for the pre- 
vention of cruelty to children or other so-called humanitarian 
bodies. There had never, in a single instance, been proof of 
abuses actually connected with this branch of the business ; no 
cases had been produced tending to show that children had actu- 
ally been murdered for the insurance payable at their death, or that 
they had, in any manner or way, been ill-treated with this end in 
view. Arguments in favor of prohibiting the business had almost 
invariably been based on English references to the subject, where, 
again, cases which were brought forward as facts were, as a rule, 
fabrications or imaginary instances of neglect. The companies, on 
their side of the argument, had presented facts tending to prove 
that insured children lived longer than uninsured children, and 
they further could point to their vast experience as proof that, out 
of the millions of years of child life which had been observed by 
Industrial companies, not a single instance of foul play or murder 
for insurance money had ever come to their notice ; and they 
could add the statement, which holds good to-day as it did then, 
that never in the history of an Industrial company had a case 
been proved where a parent had been convicted by a jury for 
having deliberately murdered a child for the sake of the few 
dollars receivable at its death for burial purposes. Nevertheless, 
continued efforts were made in 1894 to prohibit the insurance 



208 HISTORY OF THE PRUDENTIAL. 

of children in the States of Connecticut and Tennessee, as well 
as in other States, but after a fair presentation of the facts no 
laws restricting the companies from transacting this form of in- 
surance were passed during the year, nor have any such laws 
been passed since that time. 

In Colorado, where such a law had been passed in 1893, The 
Prudential had at once discontinued writing insurance on the 
lives of children under ten, although the decision had been ren- 
dered by a district court in the city of Denver that the law itself 
was unconstitutional. If the question is asked why The Pru- 
dential Insurance Company did not carry this point to a higher 
court, or possibly to the United States Supreme Court, the 
answer is that the Company prefers to abide by the will of the 
people, and if the majority of the Legislature decide that this 
form of insurance shall not be transacted, the Company is willing 
to abide by the decision. Evidence is not wanting tending to 
show that after the law had been passed many of the more intel- 
ligent members of the Legislature recognized the inexpediency of 
the measure, and it may not be out of place in this connection to 
quote a remark from the annual report of the Insurance Super- 
intendent of Colorado for 1894, in which the view that the trans- 
action of this form of insurance is not detrimental to public policy 
is fully accepted by one qualified as Insurance Superintendent to 
express an opinion on the subject : — 

This kind of insurance is making vast strides and has almost reached 
the billion-dollar mark in amount of risks written. It is particularly the 
poor man's field of patronage, and vindicates the superior intelligence and 
discernment of the working class. The companies handling Industrial in- 
surance rank high, and a breath of suspicion or distrust has never touched 
their financial fabric. As to the claim that Industrial insurance encourages 
child-murder and prompts the murderer's hand to despoil tender youth of 
life, we insist proof has never been brought forward sufficient to show that 
crime committed to secure insurance on a child's life has been nearly so 
frequent as crime committed to secure insurance placed on adult lives in 
old-line companies. 

As regards so-called discrimination against negroes, further 
efforts were made this year to pass laws to prohibit companies 
from making such discrimination. An effort had been made in 
New Jersey during 1893, an( i a bill to this effect had been passed, 
which, however, had been vetoed by the Governor. In opposing 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 209 

a measure to this effect introduced in the Legislature during the 
early part of 1894, The Prudential Insurance Company presented 
figures and facts tending to show that the Company would not be 
warranted in granting the same benefits to colored policy-holders 
as to whites. The Actuary of the Company furnished data from 
the Company's own experience, making clear the excessive mor- 
tality prevailing among colored risks, and it was shown that 
instead of discriminating against the negroes, the Company had, 
in fact, been more liberal towards this race than towards the 
white population. The Company, however, could not feel war- 
ranted in granting similar benefits to both races without doing an 
injustice to its white policy-holders, who would be compelled to 
pay for an unwarranted liberality towards negro applicants. The 
bill, unfortunately, passed both houses of the Legislature, and 
was approved by the Governor. The views of the Company on 
this subject were fully set forth in a letter dated September 5, 
1894, to the editor of the Indicator, over the signature of the 
Vice-President of The Prudential : — 

The Prudential began to issue policies November 10, 1875. From that 
date to April 1, 1881, the applications of colored persons were considered 
by the Company on the same terms and conditions as the applications of 
white persons. In the early part of 1881 it was discovered that the number 
of claims paid by the Company on the lives of colored persons, as com- 
pared with the total number of claims, exceeded the proportion which the 
colored business of the Company bore to its whole business. This led to 
an investigation into the Company's mortality experience amongst the two 
classes of risks (white and colored"), and, although at this early period of 
the Company's history the number of colored persons on the books of the 
Company did not compose a body large enough to furnish data for an ex- 
tended research, positive evidence was found, from the data at hand, that 
the rate of mortality amongst colored persons insured in The Prudential 
was considerably above the rate which obtained amongst white persons in- 
sured in the Company. While the office investigation was being carried on, 
health reports were obtained from nearly all of the large cities east of the 
Mississippi. In a number of these reports it was found that the mortality 
was recorded by white and colored lives. A tabulation of the contents of 
the reports which gave the mortality by races confirmed the conclusion 
arrived at from the office experience. 

As the result of its investigations the Company decided to use a special 
table of benefits (amounts insured) for colored persons. In the case of adults 
(ages 12 to 70) this table gave one-third less benefit to a colored person 
than was granted for the same premiums to a white person of equal age. In 
the case of infants (ages 1 to 12) the tables gave to colored infants forty per 
cent, less benefit than the amounts granted to white infants. 



2IO . 



HISTORY OF THE PRUDENTIAL. 



Since 1881 the mortality of the Company has been carefully tabulated 
each year by white and colored risks. Each tabulation has confirmed the 
first investigation of the Company, and nothing has been discovered in our 
experience which has led us to modify the tables of rates determined upon 
at that time. 

The following table shows the amounts which The Prudential has paid 
in claims for each $1,000 of insurance exposed to risk of death on white and 
colored lives for the ten years beginning with 1884 and ending with 1893 : — 

LOSS IN CLAIMS PER $1,000 OF INSURANCE EXPOSED TO RISK. 

Ai<i, Ages, 1-70. 



Year. 



White Persons 


$15 27 
16 04 


17 90 

16 59 
16 60 


15 45 


17 11 
16 71 


17 91 



Colored Persons. 



1884, 

1885, 

1886, 

1887, 

1888, 

1889 

1890, 

1891, 

1892, 

1893 

Average 10 years, 



17 34 



$18 


75 


22 


47 


24 44 


21 


49 


21 


68 


21 


43 


21 


49 


21 


44 


21 


32 



21 89 



$16 96 



521 63 



But the high mortality amongst colored persons is not the only objec- 
tionable feature to the writing of life-insurance policies on their lives. We 
find, from our office statistics, that policies on colored lives lapse in far 
greater ratio than policies on white persons, and that the highest percentage 
of lapse comes within a very few weeks of the issuance of the policy. In fact, 
the greater portion of the colored business issued by The Prudential is not 
continued on the books of the Company long enough to recoup the Com- 
pany for the initial expenses of getting the business. In many cases those 
who continue their policies do not seem to value them or lay much stress 
upon their possession. Numerous instances are found upon our books 
where policies on colored people have been lapsed and revived a dozen or 
more times. 

As pertinent to this question, we might state here that within the past 
two or three years several States have passed laws compelling life-insurance 
companies to consider applications of colored persons on the same terms 
and conditions as the applications of white persons. Such legislation has 
been enacted notwithstanding that all the evidence pointed to the fact that 
the passage of these so-called anti-discrimination laws would constitute a 
serious menace to the life-insurance companies in case there should be a 
widespread demand among negroes for life-insurance policies. In the States 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 211 

where such legislation has been enacted The Prudential will receive the 
application of a colored person under certain rules. Its agents, however, 
are forbidden to canvass for such applications, and no commissions whatever 
are paid on premiums collected from colored persons. In those States 
which allow discrimination between the two races, and in which The Pru- 
dential may consider applications from colored persons under its rules, we 
have recently issued instructions that our agents shall write only a small 
percentage of their whole business amongst colored persons. 

This letter is not intended as an expression of opinion, personal or 
otherwise, with regard to the moral or the social conditions of the colored 
race. It is intended as a statement of the facts and conclusions which 
cause The Prudential to take the position which it does with respect to the 
colored race as insurance risks. Neither are any of the objections herein 
stated, except as to mortality, directed against that class of colored persons 
who are possessed of intelligence and thrift, and whose social and moral 
lives are such that they are a credit to the community in which they reside. 
It may be that if this class could be separated from the colored race as a 
whole the mortality amongst them might be considerably less than among 
the entire body ; but we are quite sure that the mortality, even amongst the 
best of colored lives, would not compare favorably with the mortality 
amongst the whites. 

Leswe D. Ward, 

Vice-President The Prudential Insurance Company of America. 



In consequence of the New Jersey law, passed in 1894, The 
Prudential Insurance Company to-day makes no effort to obtain 
colored risks at rates which it feels would be prejudicial to the 
business as a whole. In this respect, however, the Company 
differs from some other Industrial companies, which still continue 
to solicit colored risks in more or less large proportions. With 
The Prudential this question has never been a matter of opinion, 
but a matter of thorough study, investigation and observation, and 
until facts to the contrary are forthcoming, tending to prove that 
the mortality of the colored race more nearly approximates the 
mortality prevailing among the white population, the Company 
is not likely to change its practice in dealing with this class of 
risks. 

An effort was also made in 1894, i n ^ e State of New 
Jersey, to pass a law compelling Industrial companies to grant 
paid-up policies in event of lapse after three years. It has been 
pointed out that The Prudential had already voluntarily conceded 
to its policy-holders a five-year paid-up policy, and the Company 
opposed the measure on the ground that Industrial policies did 



212 HISTORY OF THE PRUDENTIAL. 

not warrant surrender privileges during the first few years of 
policy duration, in consequence of the large initial expense in 
transacting this form of insurance. The effort did not prove suc- 
cessful in 1894, b u t another attempt was made during 1895, when 
a bill to this effect became a law. 

As has previously been pointed out, the Company, during 
1894, na( l made enormous progress in the extension of its busi- 
ness operations, having gained an exceedingly large proportion of 
new policy-holders, increasing the total number of Industrial 
policy-holders by the 31st of December, 1894, to 2,256,014, for 
an aggregate amount of insurance protection of $259,840,000. 
The net increase in policy-holders had been 314,481, equal to 
16.2 percent, over the preceding year. Here again it may be 
proper to refer to a point so easily misunderstood by those who 
have not made an extensive study of insurance methods. It will 
be observed, on comparing the net increase in business in force 
with the vast amount of new business written during the year, 
that, while over a million and a half of new policies had been 
written, only a net increase of a little over 300,000 policies had 
been made. This enormous difference is to be explained on the 
ground that in Industrial insurance every policy issued is counted 
for actuarial purposes, irrespective of the fact whether any 
money has been paid on the same or not. While the agent is 
required to collect the first premium, very often this is not done 
and the majority of policies which lapse for non-payment are 
new policies of less than six weeks' duration. 

A large number of lapsed policies in Industrial insurance 
are merely a bookkeeper's statement made for actuarial pur- 
poses, and do not represent a material pecuniary loss to the 
public, but rather a considerable loss to the companies. 
Hence, the very large amount of new business written and 
lapsed during 1894 may at least be said to point to indirect 
benefits in the nature of insurance education, in that over a 
million people were made familiar with Industrial policies and 
Industrial insurance literature, even though they did not at the 
time consider it to their interest to keep the policies in force. 
They lost practically nothing in the few premiums which, in 
most cases, had been paid, and at least they had had an insurance 
protection extending over a period of the six weeks or more 
that the policy had actually been in force, since four weeks' 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 213 

grace is allowed on every Industrial policy, and every possible 
opportunity is given for revival or reinstatement. The companies 
can not be charged with a lack of liberality in dealing with this 
class of policy-holders, or a lack of good judgment in attempt- 
ing to extend as rapidly as possible its business operations in 
all parts of the country where offices have been opened. 

In few instances has the good work of the Company been 
more emphatically recognized than in the New York Independent 
of December 13, 1894, where I find it stated that " The 
Prudential Insurance Company of America has, to our way of 
thinki?ig, done one of the most noble works of any corporation in 
the land. It is excellently well managed, and is rapidly increas- 
ing its business." 

The year 1895 found the Company in an excellent financial 
position, with over $13,000,000 of accumulated assets, with a 
surplus of almost $3,000,000, and a rapidly extending Ordinary 
business, now reaching proportions exceeding the business 
transactions of a large number of companies established for 
more than thirty or forty years. 

The year proved, in many respects, one of the most 
remarkable in life-insurance history. A large number of bills 
adverse to the interests of the insurance business were intro- 
duced into the Legislatures of many States. The Industrial 
business was seriously attacked, partly on account of policy 
conditions relating to surrender values,* largely on account of 
the practice of Industrial companies in accepting small risks 
on the lives of children. As has previously been stated, an effort 
had been made in the State of New Jersey in 1894 to compel 
Industrial companies to grant a surrender value after three years 
of policy duration. The effort had failed, but a new attempt 



* Although Paid-up policies had been granted by The Prudential and 
other Industrial companies since January 1, 1892, even as late as 1896 a 
report published by the New York University Settlement Society contained 
a bitter and unwarranted attack on the business of the Industrial companies, 
concluding with the statement that "there are no Paid-ups in Industrial 
insurance." Even the most superficial investigation or inquiry at the 
offices of the companies would have made it clear that every policy issued 
since 1892, and by retroaction all policies issued previous to that year, 
contained a clause granting a surrender value in the nature of Paid-up 
insurance. 



214 HISTORY OF THE PRUDENTIAL. 

made during the early part of 1895 proved successful, and a bill to 
this effect became a law. Referring to this species of legislation, 
the Insurance Monitor, under date of April 1st, well said that — 

The object of this law was to compel the payment of surrender values 
by industrial companies at the end of three years. It originated in 1893 — 
as so many insurance measures have originated — with a member who had 
once been employed as an industrial agent, and who had had a personal 
grievance with his company. This man did not claim to have any such 
knowledge of the business as would enable him to decide what surrender 
values could safely be paid. But the surrender value- of New York, which 
expressly relieved industrial companies from its operations, was copied in 
nearly all its essential features, and made applicable to this class. 

The legislative committees were shown, not merely by figures furnished 
by the company, but by figures in the archives of the State, that there was 
absolutely no such fund in the possession of the companies as was assumed 
in the bill from which the surrenders could be paid. They were shown that 
any payments made must be taken from funds which, if they belonged to 
the policy-holders at all, were the property of those who had been longer 
insured. They were shown that all the objects aimed at in the bill had 
already been accomplished by competition, and that it was an attack on the 
interests of those longer insured. They were shown that the bill was directed 
against the institutions of their own State in the interest of outsiders. 
These committees and legislators were appealed to by some of the most 
influential men of New Jersey not to do this unjust thing. It was openly 
confessed by members of their own body that not a single sufficient reason 
had been shown for its passage. 

In compliance with the law, The Prudential, under date of 
June 24th, issued the following circular letter for the information 
of its agency force and the general public : — 

PAID-UP POLICIES. 

All policies issued after July 1st will be subject to Paid-up Policies after 
three years' premiums have been paid, provided written demand is made for 
the Paid-up Policy within three months from the date of lapse. 

In the case of Life Policies, Paid-ups will be issued either for the Whole 
of Life or for the Expectation of Life, as the person insured may elect. 
Tables of Paid-ups per $100 of original insurance under the latter plan will 
be printed in the policy, as per present practice. In the case of Endowments, 
Paid-up Policies will be for proportioned parts, as at present ; but the period 
after which a Paid-up may be obtained will be reduced from five to three 
years. 

This concession will apply only to policies issued on and after July 1, 1895. 

In the same circular letter it was stated that all policies issued 
after July 1st would be incontestable after two years, and a further 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 215 



concession was made with respect to immediate benefits under 
infantile policies, which I quote as follows : — 

IMMEDIATE BENEFITS. 

It has been decided, with respect to the " Immediate Benefit" conces- 
sion, to modify the Infantile contract to this extent : That the sum payable * 
in case of death within three months from date of policy will be shown by 
the following table. After three months the present benefits will be payable. 
The benefits in the Colored Infantile Policy will be reduced in proportion. 
The benefits in the Adult Policy will remain the same : — 

TABLE OF BENEFITS— FIRST THREE MONTHS OF INSURANCE. 
For a Weekly Premium of Five Cents. 



AGES. 




2 


3 


4 


5 


6 


7 


8 


9 


10 


11 


12 


Infantile — White, 


$8 


$10 


$11 


$13 


$15 


.517 $20 


$22 


$25 


$30 


$35 



Mention has been made of an earlier concession to the policy- 
holders of The Prudential on policies designated as ' ' Special 
Adult ' ' business. Dividend additions had been provided for poli- 
cies of this class issued during the years 1890-' 93, of which the 
first fell due during the early part of 1895. Accordingly, under 
date of January 2nd, the Company issued the following circular 
letter relative to this class of policies : — 

DIVIDEND ADDITIONS ON SPECIAL ADULT POLICIES. 

At the end of each fifth year from the date of this policy, if in force, the 
sum hereby insured will be increased by an amount to be determined by 
the Company, and based on the surplus earnings from similar Special In- 
dustrial policies. Each Addition so made shall be considered as part of this 
policy, and subject to the same conditions and agreements. 

In compliance with this agreement, we have this day decided to add 
Three (3) per cent, to the original amount insured under all Special Indus- 
trial policies issued in the year 1890 which contain the above condition, the 
increase to apply on the fifth anniversary date of the policy, and not before. 
For example, a policy of $1,000 will be increased to $1,030, and a policy of 
$500 to $515. 

Although the evidence furnished by the documents from 
which I have quoted illustrates The Prudential's spirit of lib- 
erality in dealing with its policy-holders and its sense of caution 
in the management of the business, with special reference to 



2l6 HISTORY OF THE PRUDENTIAL. 

possible undesirable conditions, it is difficult to understand the 
large number of attempts at adverse legislation made during a 
year when the business of Industrial insurance had reached a 
sufficient degree of magnitude to be fully understood by legisla- 
tors, as well as by professional agitators and others opposed to 
the business of Industrial insurance. It is something very con- 
siderably to the credit of the intelligence and honesty of the 
average legislator that, although numerous attempts were made 
to interfere with the Company's practice in accepting risks on 
the lives of children, no laws of this nature were actually enacted. 
Such attempts were made in Missouri, Idaho, Illinois, Michigan, 
Georgia, Tennessee and Massachusetts. Of these numerous 
attempts it is only the last two which require special mention. 

In Tennessee an effort was made during 1895 to prohibit the 
insurance of children under twelve years of age. The Insurance 
Committee of the Legislature gave a number of hearings on the 
subject, and convincing facts were presented by the companies, 
on the basis of which it was not considered expedient to legislate 
adversely to the business. Without going extensively into an 
interesting phase of insurance legislation, I may add that, in 
response to a circular of inquiry addressed to a large number of 
well-known practicing physicians, charitable agents and health 
officers in the cities of Tennessee and Kentucky, asking for an 
expression of opinion on the subject of insurance of minors, 
numerous replies were received, all more or less strongly in favor 
of the system. The letters were presented to the Tennessee 
Legislature, and I quote a few of the characteristic statements 
to show what experienced and intelligent men thought of the 
business at the time. Dr. Edwin Hawes, agent of the Louisville 
Charity Organization Society, expressed the emphatic opinion, 
based on personal experience, that — "The result of my investi- 
gation was that I became thoroughly satisfied that Industrial 
insurance was a great blessing to the people. It has enabled 
great numbers, under my own observation, to bury their dead 
without having to call on the public for help as dependents on 
the city authorities. I have never heard of a single case where 
there was the least cause of suspicion of foul play in the sickness 
or death of an insured child. ' ' Dr. Thomas L. McDermott, Presi- 
dent of the Louisville Academy of Medicine, stated that — " In my 
experience, which is large, I have nothing to say but to commend 



THE PRUDENTIAL INS. CO. OF AMERICA, l894-'o,6. 217 

the insurance of children, especially among the lower classes, as 
it really furnishes the means of securing medicines, burial, etc. I 
have not, in a single case, seen anything wrong in the management 
of these cases. ' ' Dr. R. L. Vaught, Professor of Anatomy, Chatta- 
nooga Medical College, stated that — " I have been engaged in the 
active practice of medicine in the city of Chattanooga for eight 
years, and among the people I have served professionally have been 
many who carried what is known as Industrial insurance upon 
the lives of their children, and I have never yet known of a case 
of abuse or neglect of such children by reason of a desire upon 
the part of the parents to secure the insurance money. ' ' Among 
others approving of the system were Dr. W. P. White, Health 
Officer of Louisville ; Dr. F. S. Reynolds, County Health Officer 
of Memphis, and Mr. Thomas H. Taylor, Chief of Police of the city 
of Louisville. Mr. Taylor said that — " During the whole of my 
incumbency in office I have never known or heard of a case where 
parents or others were either charged or suspected of abuse or mal- 
treatment of their children for the purpose of getting the proceeds 
of insurance on their lives. If such had been the case in this city, 
I feel sure it would have been brought promptly tQ my attention. ' ' 

Influenced, no doubt, by the large body of evidence furnished 
by the Industrial insurance companies, the Legislature of Tennes- 
see, after careful investigation, refused to interfere in any manner 
with the business of Industrial insurance. 

The attempt made in Massachusetts this year to prohibit the 
insurance of children under ten years of age was, however, un- 
questionably the most determined effort ever made to interfere with 
an essential and integral part of the business of Industrial insur- 
ance companies. An organized and unusually determined effort 
was made by certain members of the Society for the Prevention of 
Cruelty to Children, and lengthy hearings were granted by the 
Legislature to both sides of the controversy.* Among others, 



* The opposition to the insurance of children, on the part of this 
society, was in marked contrast to an earlier view expressed in the annual 
report for 1891, where it was stated that — "We find in English reports that 
parents are charged with insuring the lives of their children in order, by 
neglect, if by no worse crime, to destroy the child to secure the insurance. 
We have taken pains to inquire into this practice here, but have found no 
evidence of such intent, although many insure their children's lives and use 
the proceeds, in case of death, to provide for funeral expenses." (p. 11.) 



2l8 



HISTORY OF THE PRUDENTIAL. 



Mr. Dryden appeared before the Insurance Committee and pre- 
sented a comprehensive statement of carefully collected data and 
statistics tending to show that, as far as the Company had been 
able to learn, there was no evidence that the business was detri- 
mental to public policy, but that, to the contrary, there was an 
abundance of proof tending to show that Industrial insurance 
was, in all respects, an agency making for the promotion of thrift 
and the general welfare of the industrial population.* 

Mr. Dryden first called attention to the fact that the actual 
mortality experience of The Prudential, during the eleven years 
1 883-' 93, of children aged one to nine had been more favorable 
than the expected mortality by the life table on which the Com- 
pany's rates were based : — 

COMPARISON OF THE PRUDENTIAL MORTALITY EXPERIENCE 
WITH FARR'S ENGLISH LIFE TABLE. 

Ages i to 9. 



Age. • 


Prudential Experience, 
Eleven Years. 


English Life Table 
No. 3. 




(1883-1893.) 


I 


61.55 


65-59 


2 


30.35 


36.14 


3 


20.35 


24-33 


4 


15-23 


17.92 


5 


H.85 


13-53 


6 


9.04 


10.75 


7 


6.92 


9.16 


8 


6.IO 


7.69 


9 


5-40 


6-57 



It will be observed that, at every age under consideration, 
the mortality experience of The Prudential was lower than that 
shown, by Farr's Table No. 3, to obtain among the general popu- 
lation. Mr. Dryden pointed out that it could not be argued that 
insured children represented selected lives, since the Company 
did not make use of medical examinations for children under the 



* Those interested in the history and practice of Industrial insurance 
companies should address the Secretary of the Company for a copy of Mr. 
Dryden's " Statement," which forms one of the really important and perma- 
nently useful contributions to Industrial insurance history. 



THE PRUDENTIAL INS. CO. OF AMERICA, l8o4-'96. 219 

age of ten years. Rather to the contrary, a higher mortality 
of insured children should be expected, since the children of the 
general working population were subject to a much higher death- 
rate than the well-to-do or the rich. The argument was further 
supported by abundant statistical data for Massachusetts and 
other New England States, showing that there had been a very 
material decrease in the mortality of children since the introduc- 
tion of Industrial insurance. 

To clear away a very serious misunderstanding met with 
among those who had not studied carefully the question of Indus- 
trial insurance, Mr. Dryden pointed out that the average amount 
paid on claims on policies under the age of nine had only been 
$24.74. I copy, in part, the table presented by Mr. Dryden to 
show the average amount paid on claims at various ages during 
the period i890-'94 : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

Claims Paid During Five Years (1890 to 1894) on Infantum 
Policies, Ages i to 9. 



Age at Death. 


Number of 


Amount of 


Average 


Claims. 


Claims. 


Claim. 


I- 2 


3,934 


$76,645 00 


$19 48 


2- 3 


5,772 


114,725 OO 


19 88 


3- 4 


4,091 


91,768 00 


22 43 


4- 5 


3>o78 


78,064 00 


25 36 


5-6 


2,417 


73,895 00 


30 57 


6-7 


2,011 


72,422 00 


36 01 


7-8 


1,607 


68,529 00 


42 64 


8-9 


1,203 


61,050 00 


50 75 


9-10 


984 


58,984 00 


59 94 



In commenting upon the table Mr. Dryden well said that 
"At the tender ages, when there would be danger, if danger 
existed, which we deny, the amount is so small as to be 
insufficient for burial expenses, to say nothing of medical 
attendance, medicine, and other necessary disbursements in 
such cases. ' ' * 



* The cost of funerals varies with different localities. Customs and 
circumstances have much to do with the actual outlay, and it is very 
difficult to discuss the question of funeral expenses of children, on the 



220 



HISTORY OF THE PRUDENTIAL. 



Additional proof that the insurance of children was not det- 
rimental to child life was furnished by a table supplied by Mr. 
Dry den, which shows the comparative mortality of adults and 
children as to the expected and the actual loss for each group 
of risks : — 



MORTALITY EXPERIENCE OF THE PRUDENTIAL INSURANCE 

COMPANY OF AMERICA. 

Comparison of Infantum and Unexamined Adui/t Policies. Policies 
in Force Less than One Year. 

Expected and Actual Eoss on each $1,000,000 Exposed to Risk of Death. 



Class of Risks. 


Expected Eoss, 
Farr Table No. 3. 


Actual Eoss. 


Ratio 
Act. to Exp. 


Adult, 


$12,741 OO 
15,617 OO 


$13,447 OO 
13,046 OO 


105.5 
83.5 



From this table it is quite clear that, while the actual mor- 
tality of adults exceeded the expected mortality in the ratio of 
105.5 t° every $100, the ratio of infantile claims was only 83.5 
to every $100 of expected loss. Hence, as far as the Com- 
pany's experience was able to disclose possible detrimental 
conditions, it had clearly been proven, on the basis of actuarial 
testimony of unquestioned value, that the practice of the com- 
panies was not adverse to the interests of insured children or the 
general population. Mr. Dry den concluded his argument with a 



basis of statistics, but it may be of interest to the reader to learn that in 
the city of Newark, N. J., the cost of burial, including the grave and what 
is usually looked upon as the common decencies, is $25 at age one, $35 
at age five and $50 at age ten. These amounts correspond very closely 
with the average sums paid at the death of insured children in the expe- 
rience of The Prudential. In the city of New York the lowest cost of 
funerals for children under the age of four is stated to be from $12 to 
$18, but the actual average cost is no doubt higher, at least where a little 
more than the barest necessity is provided. If to these items is added 
the cost of the last illness and the extra expenses incident to a death in 
a family, it will be apparent that the amounts paid by Industrial compa- 
nies, at the death of children, are not more than sufficient to meet the actual 
cost of burial and last illness. 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 221 

number of quotations from an exceptionally able work on ' ' The 
English Poor," by Mr. Thomas Mackay, to-day recognized as one 
of the highest authorities on English Poor Law administration 
and the social and economic conditions of the people.* Mr. Mac- 
kay considered the subject of Industrial insurance in an entire 
chapter of the work referred to, but I must needs limit myself 
to a few brief extracts which will indicate the results of his ex- 
tensive personal investigations : — 

It is not too much to say that the country owes a great debt of gratitude 
to these institutions. They have kept alive, during a very dark period of 
working-class history, some small interest in the principle of insurance, 
some respect for this valuable expedient of survival amid the dangers of 
civilized life. 

The philanthropists complain that these insurances rarely provide any- 
thing more than a funeral benefit. But, we ask, have not these very philan- 
thropists been parties to the conspiracy which has taught men that the 
State will give a pension to their wives and children when they die ? By a 
miracle the poor man's abhorrence of a pauper funeral has survived the 
machinations of the philanthropist. On this not too hardy instinct of inde- 
pendence the commercial companies have had to work.f 

With a fatuity which is almost incredible, well-meaning philanthropists 
have endeavored to disparage the work of these societies, because forsooth they 
adapt themselves to the necessity of the case and collect the premiums 
weekly by house-to-house visitation. 

As has previously been stated, the subject was considered in 
all its bearings, the facts were fully set forth, the members of the 
Legislature were fully informed as to the merits of the contro- 
versy, and the proposed law prohibiting the insurance of children 
under ten failed of passage by the overwhelming vote of 149 
members in favor of Industrial insurance against 23 members 
opposed to it. The conclusion is therefore warranted that this 
vote, following as it did upon the most extensive investigation 
ever made into Industrial insurance in this country, is a positive 
endorsement of the entire scheme of Industrial family insurance 



* Published by John Murray, London, 1889. 

t "We need measures which shall increase individual responsibility 
rather than diminish it ; measures which shall give us more self-reliance 
and less reliance on society as a whole. We cannot afford to countenance a 
system of morals or law which justifies the individual in looking to the 
community rather than to himself for support in age or infirmity." (Arthur 
T. Hadley, "Economics," p. 63.) 



222 HISTORY OF THE PRUDENTIAL. 

as it is carried on at the present day. * That Mr. Dryden' s remarks 
carried weight with those who were anxious to consider with 
justice and fairness both sides of the controversy is perhaps best 
illustrated by the following extract from the Insurance Herald 
under date of May 30, 1895 : — 

Of the literature which the contests evoked the statement of President 
John F. Dryden, of The Prudential, made before the Committee of the Massa- 
chusetts Legislature is the most valuable contribution to the general knowl- 
edge of industrial insurance and its progress that has yet been made. It is a 
complete answer to the sentimental charges that have been trumped up 
against the practice of insuring each child in the general scheme of family 
insurance. President Dryden's statement has been issued in pamphlet form, 
and a copy of it should be placed in the hands of every official connected 
with public and private charity organizations. These bodies could perform 
no greater work for the general good than to spread the practical gospel of 
industrial insurance among the poor as the stepping-stone to self-reliance 
and proper pride. By a careful study of the pamphlet they would them- 
selves perceive the great benefit that industrial insurance is conferring upon 
the American people. Mr. Dryden deserves the thanks of all his colleagues 



* The large majority vote cast in favor of the system of family in- 
surance, and against a measure tending to prohibit an integral part of the 
business, is of special significance in this case. It has well been said of 
such public approval, when expressed by the vote of a decisive majority, 
that "To responsible politicians the course to be pursued will depend 
mainly on fluctuating conditions of public opinion. Restrictions will be 
imposed, but only when and as far as they are supported by a genuine 
public opinion. It must not be a mere majority, but a large majority ; 
a steady majority ; a genuine majority representing a real and earnest 
desire, and especially in the classes who are most directly affected ; not a 
mere factitious majority such as is often created by skillful organization and 
agitation ; by the enthusiasm of the few confronting the indifference of the 
many. In free and democratic States one of the most necessary but also 
one of the most difficult arts of statesmanship is that of testing public 
opinion, discriminating between what is real, growing and permanent, and 
what is transient, artificial and declining. As a French writer has said, 
' The great art in politics consists not in hearing those who speak, but in 
hearing those who are silent. 1 " (William Edward Hartpole Lecky, "The 
Map of Life," p. 140. Longmans, Green & Co., New York, 1899.) To these 
words of Mr. Lecky the writer would add that the masses, who as a rule 
have been silent when the most unwarranted charges have been made 
against their intelligence and morality, will not fail to assert themselves in 
a manner wholly unexpected by those whose slight knowledge of the 
people forbids a more intelligent appreciation of the efforts and struggles 
of the working people. 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 223 

for his clear, direct and forcible demonstration of the public value of the 
scheme of family insurance which he represents in his great company. 

A further endorsement of the practice of Industrial com- 
panies is to be found in the annual report of the Insurance 
Commissioner of Connecticut for the year 1895, where it is 
pointed out that — 

Charges of gross neglect and even murder of children, for the sake of 
the insurance upon their lives, are of too serious a character to be over- 
looked. These charges, however, are as easy to make as they are difficult to 
prove, but until they are supported by proof they should have no influence 
upon our judgment. I do not know of any facts which prove such a con- 
clusion, and I have been unable to find any case where a child has been 
murdered for the sake of the insurance upon its life. On the other hand, 
the testimony is that such insurance makes the parents thrifty and provident, 
and statistics show that the rate of mortality among insured children is less 
than the rate among children generally. 

Other valuable contributions with special reference to the 
insurance of children were made this year by Dr. Hugh R. 
Jones, in his prize essay on the \ ' Perils and Protection of Infant 
Life, ' ' published in the ' ' Journal of the Royal Statistical Society, ' ' 
Vol. LVII. Dr. Jones concluded his observations with the 
remark that — " I have briefly reviewed the more important evi- 
dence existing on the subject. I have weighed, as carefully as 
I am able, all the information I have gathered. I have discussed 
the subject with medical men resident in districts where insur- 
ance prevails extensively, and my own conclusion is that the 
evils of child insurance have been unnecessarily exaggerated. 
* * * * The incentive to child-neglect and child-murder is 
not the prospective receipt of insurance money. * * * * 
Cases of neglect are more frequent, into which the element of 
insurance does not enter, than those upon which it is supposed to 
exercise influence." Other valuable papers on child life insur- 
ance were read by Mr. J. Moon and Mr. W. H. Aldcroft, before 
the Insurance Institute of Manchester, England, which also form 
valuable contributions to our knowledge of the subject.* 

* Few men have had better opportunities to study scientifically the 
various aspects of the question of life insurance for minors than Mr. David 
Parks Fackler, for many years the Actuary of the New Jersey Insurance 
Department, Consulting Actuary to many life-insurance companies and one 



224 HISTORY OF THE PRUDENTIAL. 

The concensus of opinion of those who investigated the 
subject most carefully, and who relied upon the only basis of 
fact which should be taken into account in any legislation upon 
the subject, — that is, the statistical evidence supplied either by 
the companies or the government, — was therefore in favor of the 
practice of the companies, and it may be asserted with confidence 
that legislators and others will continue to take into considera- 
tion the evidence and the body of facts on which the Industrial 
companies rest their side of the argument. 

The business progress of the year 1895 was > no doubt, 
partly interfered with by the large number of attempts at ad- 
verse legislation to which reference has been made. There was 
also a natural reaction after the previous year's operations, and 
the increase made in policy-holders during the year 1895 was 
materially below the average. However, while many other com- 
panies experienced a decrease in the total amounts of insurance 
in force, The Prudential succeeded not only in holding its own, 
but in adding almost 75,000 Industrial policy-holders to its already 
large number of patrons. Noting briefly the condition of the 
Company under date of December 31, 1895, tne annual report 
states that the total number of policy-holders had now reached 
2,330,741, for an aggregate amount of $268,414,100 of Industrial 
insurance protection. In the Ordinary department the number of 
policy-holders had increased to 30,893 for $34,716,055 of insur- 
ance protection. The finances of the Company were in an 

time President of the Actuarial Society of America. Under date of March 
19, 1895, Mr. Fackler addressed a long letter on the subject to the editor 
of the Weekly Underwriter, from which I make a brief extract: — 

" I well remember how much concern I myself felt some fifteen years 
ago, when infantile insurance was first introduced in this country, lest it 
should prove an incentive to child murder, as is now claimed periodically 
by people all over the land. 

"My own doubts on the subject were purely theoretical, and were 
entirely dispelled by the a priori considerations that the insurance on poor 
children may often be the means of saving their lives, because when they 
are very sick their recovery is often only a question of whether they can 
have proper medical attendance and nourishing food, and if the parents are 
very poor they may fear to incur desirable medical or other expenses, lest 
they should prove ineffectual and be followed also by a heavy funeral outlay. 
But when the child is insured there is little reason to fear about making the 
necessary expenditures, for if the doctor can do no good, all the expenses 
•will be covered by insurance." 



THE PRUDENTIAL INS. CO. OF AMERICA, iSo^'oA 225 

excellent condition, and considerable progress had been made in 
establishing more firmly the business already on the books of the 
Company. 

The watch- word of The Prudential, as given to the field force 
in the annual address of the President, was concisely stated in the 
words that ' ' The business that stays is the business that pays, ' ' 
and more stringent orders than had ever previously been issued 
were sent out to superintendents, assistants and agents to put forth 
every effort to reduce the lapse-rate and encourage policy-holders 
to keep their policies in force. The year was one during which 
many internal improvements were introduced into the practice of 
the Company, which, however, for want of space, can only be 
briefly discussed. 

With the beginning of the new year The Prudential intro- 
duced a number of new features in its Industrial policy con- 
tracts, the most important of which was a radical change in 
the table of benefits for ages under ten years. A copy of the 
new table is given below, together with the necessary explana- 
tory information : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 
Tabi,e of Infantile Benefits, for a Weekly Premium of 5 Cents. 



Benefit Payable if Policy has 
been in Force for 



Less than 3 m os., 

More than 3 mos. , but less than 6 mos. , 
More than 6 mos. , but less than 9 mos. , 
More than 9 mos., but less than 1 year, 

One year, 

Two years, 

Three 

Four 

Five 

Six 

Seven 

Eight 



Age Next Birthday When 


Policy 


is Issued. 


2 


3 
$ 9 


4 

$10 


5 

$11 


6 


7 


8 


9 


$ 8 


$12 


$14 


$16 


$20 


10 


IT 


13 


14 


16 


19 


22 


28 


12 


14 


16 


18 


22 


26 


35 


50 


15 


17 


20 


24 


29 


35 


50 


75 


17 


20 


24 


29 


39 


55 


80 


120 


20 


24 


29 


43 


60 


«5 


120 




24 


29 


47 


65 


90 


120 






29 


51 


70 


95 


120 








55 


75 


100 


120 










80 


100 


120 












100 


120 














120 

















Twice the above amounts will be paid for a weekly premium of 10 cents ; 
but no higher premium than 10 cents will be taken. 



226 HISTORY OF THE PRUDENTIAL. 

Under this table higher benefits were payable at the younger 
ages than had been the practice since 1887, when the last rate 
tables had been adopted, and the somewhat complex and involved 
points are best brought out in the following extract from the 
Spectator of December 26, 1895: — 

The new infantile table gives larger benefits than under the existing 
scale, after the age of six years is reached, and finally the benefit increases 
to $120 at age nine [ten next birthday]. This is the maximum amount 
purchasable for the five-cent premium. The conditions of benefits during 
the first year are such that those who were insured at ages below six and 
who are persistent in their payments derive more from their policies, in 
event of death, than the one insured later on at the advanced age. Thus, 
there is a reward for persistency under this plan which the previous policies 
did not give. * * * * The companies have done wisely in deciding not 
to accept a higher premium than ten cents on infantile lives, and must be 
congratulated on their decision to make it an object to insure when young, 
and keep policies in force because of their increasing value. The new 
arrangement as regards infantile policies is made retroactive when the 
amounts insured at the new rate are greater than under present policies. 

The Insurance Monitor of 1896 also commented upon the 
change as follows : — 

With the beginning of the new year a change was made in the rate 
tables of the industrial companies almost radical in its character. When 
this business was first introduced into this country from England, some 
twenty years ago, almost nothing was known of the distinctive mortality 
prevailing among our industrial classes. The chief reliance was on the 
experience of the British Prudential, aided by such general observations on 
mortality in America as were furnished by the census and the experience of 
the ordinary companies. 

But neither of these two latter sources could furnish any safe guide for 
a business so exceptional in its character. Besides this, infantile insurance 
had never been attempted ; there was no such thing as a reliable infantile 
mortality experience in America. Nor was it possible to say what would be 
the cost of conducting a business under conditions so widely divergent from 
those existing in England. >» 

So it necessarily happened that the original rate tables were largely 
tentative. But being once adopted and found on the whole to harmonize 
fairly with existing conditions, they were naturally adhered to with minor 
modifications. The question was of less moment than it would otherwise 
have been, from the fact that industrial insurance is essentially family 
insurance. It takes the children with the parents and the premiums are 
paid by the old folks. An inequality of rates tends in a measure to adjust 
itself. 



THE PRUDENTIAL INS. CO. OF AMERICA, l894~'96. 227 

But this is true only in a measure, and the extent of the adjustment 
must depend on the distribution both of ages and policies in the family- 
group. The companies have now secured an experience which can be relied 
on in the future, and, taking that experience as a basis, a far more liberal 
rate table has been the result at all infantile ages, while equity has been 
established as thoroughly as in the ordinary branch. 

A very important point to which brief reference is made in 
the Spectator article was the voluntary restriction of premiums 
on lives under twelve to ten cents per week, irrespective of the 
fact whether the child had been insured with one or more com- 
panies. The clause which forms part of every Prudential Indus- 
trial policy reads as follows : — 

This Policy shall be void if there is in force upon the life of the Insured 
an Industrial Policy previously issued by this Company, unless the Policy 
first issued contains an endorsement, signed by the President or Secretary, 
authorizing this Policy to be in force at the same time ; or if the person 
insured is under twelve years of age next birthday, and is now or may here- 
after be insured while under such age in this or any other company, and the 
total premiums on such insurances shall exceed ten cents per week. If for 
any cause this Policy be or become void, all premiums paid thereon shall be 
forfeited to the Company except as provided herein. 

This clause effectually did away with all reasonable objections 
to the practice of Industrial companies in accepting small risks 
on the lives of children, as under this provision children could 
not be insured for more than a ten-cent premium, granting at 
the highest ages a sum only sufficient to meet the reasonable cost 
of burial and the expenses of the last illness. 

A new adult rate table was also introduced this year (1896), 
of which the following is an abbreviated copy, showing, for 
certain ages, the amounts to be paid at death in return for certain 
specified weekly premiums. It will be observed, on examination 
of this table, that there are certain limitations at the younger and 
at the more advanced ages, which make speculative insurance, at 
these ages, impossible. Thus, for example, at age fourteen no 
higher premium than twenty cents per week will be accepted ; 
at age twenty-three the premium limit is thirty cents ; at age 
thirty-eight, forty-five cents ; at age fifty-one, forty cents, and at 
age sixty-five, thirty-five cents. The table here given in abbrevi- 
ated form is the one now in use by the Company, but the amounts 
payable are subject to increased benefits, cash dividends and 



228 



HISTORY OF THE PRUDENTIAL. 



surrender privileges which materially enhance the value of these 
policies : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 
Adui/t Rate Tabi,e. 





WEEKLY PREMIUMS OF 


Age Next 


5 


10 


15 


20 


25 


30 


35 


40 


45 


50 


55 


60 


65 


Birthday. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 


Cts. 




$ 


$ 
























IO 


120 


240 


$ 


$ 




















15 


IO3 


206 


309 


412 


$ 


















20 


«7 


174 


261 


348 


435 


$ 
















25 


76 


152 


228 


304 


380 


456 


$ 














30 


67 


134 


201 


268 


335 


402 


469 


$ 












35 


59 


118 


177 


236 


295 


354 


413 


472 


$ 










40 


50 


loo 


I50 


200 


250 


300 


35o 


400 


450 


$ 


$ 






45 


42 


84 


126 


168 


210 


252 


294 


336 


378 


420 


'462 


$ 


$ 


50 


35 


70 


I05 


140 


175 


210 


245 


280 


315 


3\5o 


385 


420 


455 


55 


28 


56 


84 


112 


140 


168 


196 


224 












60 


22 


44 


66 


88 


no 


132 


154 


176 












65 


17 


34 


51 


68 


«5 


102 


119 














70 


13 


26 


39 


52 


65 


78 


91 















Another very important concession made this year to the 
Industrial policy-holder of The Prudential was a provision printed 
in red at the bottom of each policy stating that — "This Policy, 
if not satisfactory to the Insured, may be surrendered within two 
weeks after its date at the office of the Superintendent, whose name 
appears on the premium receipt book accompanying this Policy, 
and the premiums paid thereon will be returned to the Insured. ' ' 
Under this provision it is now possible for prospective applicants to 
carefully examine their policies during a period of two weeks, and 
then, if not satisfactory, return the same to the Company, receiv- 
ing in full the premiums paid during the period. Considering the 
large number of transactions, it must be self-evident that this con- 
cession implies a considerable money loss to the Company, volun- 
tarily incurred to increase the popularity of the business and 
extend the equitable basis on which The Prudential from the 
beginning had transacted this form of insurance. 

A still further concession was made to policy-holders this 
year, in a matter which for many years past had been one of the 



THE PRUDENTIAL INS. CO. OF AMERICA, l894-'96. 229 

most difficult questions with which Industrial companies had had 
to deal. Since October i, 1884, the Industrial policies had con- 
tained a clause restricting the liability of the Company to one-half 
of the full amount of the face value of the policy in case the insured 
died from consumption during the first policy year. This restric- 
tion had been made necessary by the fact that no medical examina- 
tion was required under policies for less than $200, and while the 
application signed by the agent contained questions and inquiries 
with special reference to the present and past health of the applicant 
and his or her family history, nevertheless a considerable amount 
of adverse selection in this direction was experienced among Indus- 
trial policy-holders. Similar reasons influenced the Company in 
its early practice in restricting its liability where death was due to 
suicide. 

In suicide cases the practice at first had been to void the 
policy entirely, but in 1884 this had been changed to a three-year 
period of policy continuance, and this period had been changed 
to two years in 1895 ; but, to make the contract as free from 
technical restrictions as possible, the Company this year elimi- 
nated the suicide clause from the Industrial contract, which is 
now practically as free as possible from burdensome restrictions. 

Thus, by 1896 the Company had so far extended its liberal 
policy that Industrial policy-holders were practically on the basis 
of policy-holders in the Ordinary department. Whatever re- 
mained to be done to improve the contract was accomplished 
during the next few years, when further concessions, made prac- 
ticable and possible in the light of more recent experience, have 
removed most of the remaining earlier restrictions. 

While the year was one during which few attempts at ad- 
verse legislation were made in the legislatures of such States as 
held annual sessions of their Assemblies, an effort was made in 
Massachusetts to revive the agitation of the previous year. The 
age limit under the new bill was only five years, but, according 
to the Boston Herald of March 3, 1896, " It required just about 
ten minutes this morning for the Insurance Committee to hear all 
who appeared to offer objections or make suggestions on the bill 
offered to prohibit insurance on the lives of children under five 
years of age. 

For the remonstrants, ex-Governor Long stated that he 
did not care to say anything upon the bill, as it was apparent 



230 HISTORY OF THE PRUDENTIAL. 

that the petitioners had practically abandoned the idea of passing 
it. ' ' Among others, the State Insurance Commissioner pointed 
out the absurdity of the bill as drawn, stating that it would be 
necessary to have the same reconstructed if it were to be further 
considered. Another bill relative to the business of Industrial 
insurance was introduced in the Massachusetts Legislature 
requiring the companies to furnish a large amount of statistical 
data, the compilation of which would not only have been very 
burdensome to the Company, but exceedingly expensive, while 
the conclusions to be drawn from such data would in a general 
way have been of little value. The existing requirements 
of the State as regards necessary statistical information are 
sufficiently strict to place before the public all the information 
which can reasonably be demanded of such companies, and this 
view prevailed with the Legislature, and the attempt of the 
opposition therefore proved a failure. 

Although the year was a Presidential year and considerably 
disturbed on account of the political agitation, the Company con- 
tinued to make considerable progress in both departments of its 
business. As one of the electoral candidates, Mr. Dryden re- 
ceived a majority vote as Presidential elector for the State of 
New Jersey. 

The intimate relation of Industrial insurance to life insur- 
ance on the Ordinary plan was ably set forth by Mr. Dryden in 
an address at the annual meeting of the Life Insurance Associa- 
tion of New York : — 

These companies reach, both in their industrial and ordinary depart- 
ments, a class of people not reached by the other companies. The ordinary 
work is a natural evolution of the industrial work. Men see the value of 
life insurance by reason of the educational power of an industrial policy, and 
the next step is an ordinary policy. Life insurance is of the most value 
when most widely distributed, and no other companies compare with the 
industrial in extent of distribution. Every time a worthy man is induced 
to take a life-insurance policy the body politic is helped. These companies 
are cultivating broadly and soundly among the masses the idea of life-insur- 
ance protection, which will bear fruit for both industrial and ordinary 
companies. Industrial agents may fairly be termed a sort of salvation army 
in life-insurance work. To the hitherto neglected masses is being carried 
the gospel of self-help, protection and a higher life. It is, we think, a fair 
statement to say that the industrial companies are doing more to spread a 
knowledge of and desire for life insurance among those who have the greatest 
need of it than all the other companies combined. 



THE PRUDENTIAL INS. CO. OF AMERICA, l894-'96. 231 

A similar reference to the extension of Ordinary insurance 
by The Prudential and other Industrial companies was made in 
the Spectator of January 9, 1896, as follows : — 

The day is probably far distant when the income from the ordinary 
branches of the industrial companies will equal that from the industrial 
business, but there is every reason to think that they will increase the volume 
of the ordinary business each year. In fact, this is bound to be the case if 
the argument held out by these companies that industrial insurance is an 
educator is correct. They have maintained, and rightly so, that the circum- 
stances of their industrial policy-holders become better from year to year, 
and as they rise in the social scale they need the protection of life insurance 
in greater amount than when first insured. Agents soon learn where they 
can place ordinary policies and push this class of insurance to the fore. 
The industrial worker of to-day must be able to hold his own in competition 
with others, whether it be for industrial or ordinary insurance he is canvass- 
ing, if he is to make a success at his calling. 

Mention has been made of the close and satisfactory rela- 
tions existing between the executive officers of The Prudential 
and the large body of agents and district managers scattered all 
over the land. As stated in the Indicator under date of March, 
1896, "Considering the drawbacks of the year, the results at- 
tained are complimentary alike to the management and the 
workers in the field. * * * * The officers have often 
boasted that no insurance company in the world has in its 
service a field staff superior to The Prudential in sterling worth, 
all-around ability to produce great results and loyal attachment 
to the Company." These remarks have special application to 
two men who almost from the beginning had been connected 
with the Company's progress, had done much to increase the 
Company's business operations, and at a critical hour, when ex- 
treme competition did much to disturb the relations of agents 
and officers, remained loyal and faithful to the Company, who 
looked upon its employees as its friends, offering the friendship 
of the executive officers and the Company to every worthy 
worker in whatsoever capacity. Mr. John F. Collins had 
entered the service of The Prudential in 1879, when he had 
already achieved success and distinction in the general life- 
insurance business, having held prominent positions in the 
executive departments of other well-known old-line companies. 
Mr. Collins died on the 29th of March, 1896, and by his death 
the Company sustained a loss which it is difficult to express in 



232 HISTORY OF THE PRUDENTIAL. 

words. While it would be impossible to do Mr. Collins justice 
in a simple tribute to his memory, it is but proper that brief 
notice should be taken of one who in a large measure was instru- 
mental in the making of The Prudential Insurance Company of 
America. I quote the following brief extract from a biographical 
sketch of Mr. Collins, published in The Prudential Weekly 
Record of April 6, 1896 : — 

His coming to The Prudential Insurance Company of America was, of 
course, his first introduction to the Industrial business, but his ripe knowl- 
edge, tact, intuition, adaptability and exceptional talent for quickly and 
rightly judging men and things, conjoined to make him in this new and, at 
that time in this country, novel field of labor, the right man in the right 
place. To him was confided the opening of Philadelphia. So well did he 
perform this task that in nine months it was deemed safe to entrust the busi- 
ness there to other hands. That was in 1880. Mr. Collins was chosen to fill 
the important position in New York made vacant by the resignation of 
Superintendent Thornton. There Mr. Collins remained until his demise, 
ten days ago, and it is but simple justice to his memory to say that to no 
individual worker of its entire Field Staff, during all those sixteen years of 
remarkable achievement, is The Prudential more indebted for its wonderful 
progress and prosperity than to the greatly lamented subject of this brief 
sketch — John Fletcher Collins. It was not alone as an efficient, painstaking 
and eminently successful Superintendent that Mr. Collins served The Pru- 
dential. In the earlier years of his connection with it the Company fre- 
quently availed itself of his wide acquaintance and varied experience, and 
called upon him to perform valuable services in affairs entirely foreign to his 
district duties. From first to last he was a true, brave and gallant defender 
of its faith and principles. 

Within a few months after the death, of Mr. Collins the 
Company sustained another serious loss in the death of Superin- 
tendent Frederick Kichbauer. Mr. Kichbauer had also been 
connected with the Company for many years, having entered the 
office in 1880 as an agent under Superintendent Fessenden in 
Brooklyn, which office had then been opened but a short time. 
What has been said of Superintendent Collins was equally true of 
Superintendent Eichbauer, who at all times and under all circum- 
stances had proved himself a most worthy employee deserving of 
the complete confidence of the Company, and equal to every task 
entrusted to his care. I quote a few remarks with reference to 
Mr. Kichbauer' s life and work from The Prudential Weekly 
Record of June 15, 1896 : — 

Such was the talent, diligence and energy displayed by Agent Eichbauer 
that two years later he was appointed Assistant Superintendent. Here 



THE PRUDENTIAL INS. CO. OF AMERICA, 1894-96. 233 

again he displayed such ability and such fidelity to the interests of the Com- 
pany that when, in October, 1885, Superintendent Fessenden died, Mr. Eich- 
bauer was chosen to succeed him. How well Superintendent Eichbauer 
managed Brooklyn District, No. 1, during the next nine years — the conspic- 
uous ability he displayed as a leader of men and a producer of results — his 
zeal to carry out the wishes of the Company and to promote its cause — the 
many brilliant victories he achieved along the whole Prudential line, Ordi- 
nary as well as Industrial, these and other things alike creditable to the 
deceased are too well known in Prudential circles to need recital. 

On January 1, 1894, Mr. Eichbauer was appointed to take charge of 
Chicago District, No. 1. His brief career in the great metropolis of the West 
is, like his Brooklyn career, familiar to all. It is to be said of this member 
of the Prudential Old Guard, that he was noted as a man who could win 
and hold the esteem and confidence of his subordinates, who was affable 
and courteous to all, and who was loyal to the Company and his friends. 
He will live in the annals of Industrial Life Insurance in America as one 
who did a great work in its cause — as one of those who, in the service of 
this, the Pioneer Industrial Company of America, ably helped to open 
new territory when it was decided to extend operations beyond New Jersey 
and make the system national in scope. The success achieved by Mr. 
Eichbauer in those days when Industrial Insurance was new and by many 
regarded as of doubtful permanency, cannot but help inspire those who are 
in the business to strive hard for the greater victories offered now to the 
pushing and the energetic. 

In Superintendents Collins and Eichbauer The Prudential lost 
men whose place can not be filled in the hearts of those who were 
familiar with their noble traits, and who had evidence of their 
exceptional ability as life underwriters in the Industrial field. 
It. is something considerably to the credit of The Prudential that 
it should have attracted to its field force men of as high a type 
as Collins and Eichbauer, in every respect worthy to be honored 
with the highest positions in the field operations of Industrial 
insurance and the extension of the principles of life insurance to 
the masses. 

After twenty years it could now be said of The Prudential 
and Industrial insurance that the work which Mr. Dryden set out 
to do in 1875 had been accomplished, and it may not be out of 
place to give a brief extract from an article, on the Company's 
twenty-year record, from the Insurance Critic, as quoted in The 
Prudential Weekly Record of November 9, 1896 : — 

Industrial life insurance as thus organized, and as applied by The Pru- 
dential and other companies, is of inestimable value as a provision for the 
careful and provident workingman, opening to him a door of opportunity 



234 HISTORY OF THE PRUDENTIAL. 

which he may enter for the purpose of making his small savings available 
to secure a larger sum for the time of need. It is a plan appealing directly 
to the thoughtful and considerate. A keen sense of personal responsibility 
and of family duties gives to life insurance a ready access to mind and heart. 
To the reflecting and well-disposed toiler, life insurance is a treasure and 
joy. Of great value is it also as an educator for the development of thrift 
and forethought among the laboring population in our great cities and other 
centres of industry. Its agents have been engaged in very important 
branches of mental and moral training, are still doing this work on an 
increasingly extensive scale, and in years to come they will carry forward 
the instruction and discipline in continuance of the earlier work of the 
school. Industrial life insurance is in every way a fountain of good influ- 
ence to the great army of mechanics, artisans and other industrial workers. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1897-98. 235 



CHAPTER XIV. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 

1897-1898. 

The year 1897 marks a new era in Industrial insurance. 
Under date of January 1st Mr. Dryden addressed a circular letter 
to the field force, in which the Company's agents were informed 
that thereafter Industrial policy-holders would be placed on prac- 
tically the same basis as Ordinary policy-holders, and that in the 
future Industrial policies would contain a provision for additional 
benefits, for cash dividends and for cash-surrender values. I can 
not do better than quote the larger part of Mr. Dryden' s letter : — 

When Industrial insurance was introduced in the United States, twenty- 
one years ago, by The Prudential, the Company did not have at its command 
a vast array of statistics upon which to base premium rates, nor were there 
any long-established precedents upon which the Company could base definite 
plans as to the future, as was the case in Ordinary insurance. It is true 
that Industrial insurance had been practiced in England for a number of 
years, but even in 1876 the business in that country was still in an experi- 
mental state, and the volume of business transacted was small compared 
with the immense proportions it has since assumed. 

The Prudential practically entered a new and untried field, certainly a 
new field in so far as the United States was concerned. In the twenty-one 
years during which it has been making a specialty of Industrial insurance, The 
Prudential has gained a vast experience and has built up voluminous records of 
the many details that enter into its business. From time to time, as the Com- 
pany has gained in experience, it has found that various changes could be made 
with advantage and that various concessions could be granted to policy-holders. 
We can not take the space to refer to these concessions here. They are a 
matter of history, and as much a part of the Company's record as the figures 
which go to show its many successes. It may be of interest and of value to 
the field force, however, to state that the total cost to the Company to date 
of the various concessions that have been made from time to time to policy- 
holders has been nearly $700,000, and hundreds of thousands of dollars will 
be paid in the future on account of these concessions. Each new move on 
the part of the Company, however, has marked a step from the experi- 
mental conditions which surrounded Industrial insurance twenty-one years 
ago to the certitude and exactness that marks the business to-day. Any 



236 HISTORY OF THE PRUDENTIAL. 

step which the Company now takes is not an experiment, but is based upon 
practical and scientific knowledge of the business ; and the effect in the 
present and in the future of any concession can be measured almost to a 
certainty. 

In keeping with the wonderful growth of the business has been the 
increase in knowledge on the part of the general public as to the benefits 
which are being conferred by Industrial insurance. At the outset the busi- 
ness was hampered by opposition of all kinds. One by one the obstacles 
raised by ignorance and prejudice have been overcome until, at the present 
time, the beneficent influences of the system are found to exert an uplifting 
tendency in every branch of life. Decreased death rates, increased savings, 
more prudence in the home, better care in case of sickness and many other 
benefits that go to make better and happier conditions of life, can be traced 
to Industrial insurance. This is not a statement based upon inference. 
Facts gleaned from health reports, savings-bank statistics and other sources 
emphatically prove the assertion. 

These remarks on the growth of the business, the extent of its influence 
and the change from experiment to certainty, are all preliminary to an 
announcement of new features in Industrial insurance, which the Directors 
and Officers of The Prudential wish to announce to you by means of this 
letter. Before entering upon the details of this new move, we wish to say 
that, notwithstanding the liberality and far-reaching effect of the concessions 
we have made in the past, the benefits we now propose to grant exceed in 
liberality and generosity all the other concessions that have ever been made 
in Industrial insurance. The concessions of the past have cost hundreds of 
thousands of dollars ; these new concessions will, in the course of time, cost 
the Company millions of dollars, or, in other words, put millions of dollars 
into the pockets of our policy-holders and their beneficiaries. In fact, the 
new features which The Prudential now introduces into the business mark 

A NEW ERA IN INDUSTRIAL INSURANCE. 

The new features consist of various far-reaching concessions to policy- 
holders, and will be found in 

A NEW POLICY CONTRACT. 

This policy, for simplicity and liberality to the insured, has never been 
approached by any Industrial insurance company abroad, and certainly not 
by any in this country. 

Let us examine the new policy. Casually glancing at it, we see in bold 
characters the words " After Five Years," " After Fifteen Years," and other 
attractive captions. Let us see what each of these means. Under the 
heading 

" AFTER FIVE YEARS— ADDITIONAL BENEFITS," 

we find that after the policy has been in force for five years the Company 
will pay, in case of the death of the insured after five years and within 
fifteen years, an Additional Benefit or Bonus, in addition to the sum insured 



INCORPORATED AS A STOCK COMPANY BY THE STATE OF NEW JERSEY. 







HS33S ©5?3SE; 



Ql^ ^UBltltffAy 



NUSftSBR 



Whole rltife Poliey. 



IN CONSIDERATION, of the weekly premium hereinafter stated, which, it is agreed, shall be paid to the Company or 
to its authorized representative on or before every Monday during the continuance of this Contract, THE PRUDENTIAL 
INSURANCE COMPANY OF AMERICA AGREES TO PAY, at its Home Office in the City of Newark, New Jersey, 
unto the executors, administrators or assigns cf the person named as the Insured in this Policy, unless settlement shall be made 
under the provisions of article second on*the back hereof, the amount of Benefit provided in the Schedule herein contained and 
any additions thereto, within twentyfour hours after acceptance at its said office of satisfactory proof of the death of the Insured 
during the continuance of this Policy, which is issued and accepted subject to the conditions and agreements printed or the back 
hereof, which are herebv referred to and made part of this Contract, 

IF THIS POLICY IS CONTINUED m FORCE, 

it will become entitled to Additional Benefits, Cash Dividends and Cash Surrender Values, as follows: 
AFTER FIVE YEARS— Additional Benefits. 

If the Insured shall die after FIVE YEARS from the date hereof, the Company will pay, in addition to the Benefit provided in 
said' Schedule, an amount to be determined from the tables of Additional Benefits issued by the Company for the year in which 

death occurs, ___^__ 

AFTER FIFTEEN YEARS— Cash Dividends, 

At the end of FIFTEEN YEARS from the date hereof and at the end of EACH FIFTH YEAR THEREAFTER, this Policy 
will be credited with a Dividend from the surplus apportioned by the Company to policies of the same age and kind, payable in 
Cash to the Insured, unless payment shall be made under the provisions of article second on the back hereof, 
AFTER TWENTY YEARS— Cash Surrender Values. 

At the end of TWENTY YEARS from the date hereof or at the end of ANY FIFTH YEAR THEREAFTER, the Company 
will pay to the Insured as a Cash Surrender Value for this Policy the amount fixed by the table printed on the back hereof, 
provided this Policy is legally surrendered to the Company within three months after the end of said twenty years or of any fifth 
year thereafter. 

OR, IF THIS POLICY IS LAPSED AFTER THREE YEHRS— Paid-up Policy. 

If this Policy shall become forfeited for the non-payment of any premium after having been in force three full years, and the 
Insured shall be over thirteen years of age at date of such forfeiture, the Company will grant a non-participating Paid/up Life 
Policy in accordance with Chapter 356 of the Laws of 1895 of the State of New Jersey, 

Schedule Above Referred to. 



NAME OF" THE INSURED 



BENEFIT, if Insured is not less than $ 

ten years of age next birthday, 

It the Insured shell die within six calendar months from the date hereof, the Com* 
pany will pay only one-fourth of this sum. If the Insured shall die after six months and 
within one year from the date hereof, the Company will pay only one-half of this sum. 
After one year from Its date the Policy will be in force for the full amount. 



AGE NEXT 
BIRTHDAY AT 
OATE OF POLICY 



WEEKLY 
PREMIUM 



TABLE OF INFANTILE BENEFITS 

For a Weekly Premium of Five Cents Subject to the Above Te 



Benefit payable If Policy has been in 



Leaf than three months. . 



More than 3 mouths but leaf than 6 months 
More than S months but less than 9 mi 
More than 9 months but less than 1 ye 



IB* Kill Blrth-V st DaU »f Poll,, 



"I— I— I- 





"is 

t€ 


t-l 

U 


ft 

•a 


t9 
TO 


65 
03 








no 







unti will be paid. for 



In Witness Whereof, the President and Vice President of said Company .have signed this Policy 
at its Home Office in the City of Newark, New Jersey, this 




Vice President. \^S President. 

This Policy, If not satisfactory to the Insured, may be surrendered within twe week* alter Its date at the office of the SnperintODdent wboae 
name appears o& the premium receipt book accompanying this Policy, and the premiums paid thinon will be returned to the Insturad. 



fllauiA* Inoostsjau — Mass. — Form or 8-98. 



INDUSTRIAL POLICY FORM AT PRESENT IN USE BY 
THE PRUDENTIAL, INSURANCE COMPANY OF AMERICA. 



Conditions and Agreements. 



.hereto, and thai all claims i 



1st PRBLIMIKAHT CONDITIO!*.— No claim will be paid OB this Policy In case of the 
death of the Insured before tbe ^ate hereof, uor unless od said date the Insured la aU»e 
and in sound bealth. 

2nd. Facility OF Payment.— The Company may make any payment provided for in 
this Policy to any relative by blood orcoouection by marriage of the Insured, or to any 
other person appearing to said Company to be equitably entitled to the same by reason oi 
baling Incurred expense in any way ou behalf of tbe Insured, for bis or lier burial or tor 
any other purpose, and tbe production by the Company of a receipt signed by any or either 
of said personsor of other sufficient proof of such payment to any or either of them shall be 
rideoce that such Benefits have been p;tid to the person or persons entitled 
that all claims under this Policy have been fully satisfied. 

d may serve in the Milifia Of in 
:e or for the purpose of preserving 
order incase of not; but iu time of war, hefore engaging in hnstilitu ■*, a written permit 
must be obtained from the Company for which an extra premium will be charged weekly 
until the Insured, after such service Is terminated, has passed a medical examination 
satisfactory to the Company, in rase of tbe death of the Insured during or after service 
in war without such permit, the liability of the Company shall be limited to the net reserve 
on this Policy at the time of death of the Inimred, computed according to the legal standard 
of the State of New Jereey. 

4th Policy When Void.— This Policy shall be void if there is in force upon the life 
of the Insured an Industrial Policy previously issued by this Company, unless the Policy 
first issued contains an endorsement, signed by the President or Secretary, authorizing 
this Policy to be in force at the Bame time; or if the said weekly prei 
paid according to the terms hereof; or if the person ' 



the Army < 



ay, and Naval Service.— The In 
vy of the UDited States, in time of peai 



shall 
under twelve years of age 

t birthday~and is now or may hereafter be insured while under such age in this or 

any other company and the total premiums oq such insurances shall exceed ten cents per 

CASH SURRENDER VALUES 



week. If for any cause this Policy be or become volu, all premiums paid thereon shall be 
forfeited 10 the Company except as provided herein. 

oth. Payment of Premiums.— All premiums are payable at the Home Office of the 
Company, but may be paid to an authorized representative of tbe Company ; but payments 
to be recognized by the Company must be entered at the time of payment in the premium 
receipt book belonging with this Policy. If for any reason the premium is not called for 
when due, by an authorized representative of the Company, it shall be the duty of the 
policy-holder, before said premium shall be in arrears four weeks, to bring or send said 
premium to the Home Office of tbe Company or to one of its district offices. 

6th. Period of Grace.— Should the Insured die while the premium on this Policy is 
in arrears' for a period not exceeding four weeks, the Company will pay tbe Benents pro- 
vided herein, subject to the conditions of the Policy. 

7th. Revival of Policy.— If this Policy is lapsed for non-payment of premium, it 
will be revived within one year from the date, of lapse upon written application and pay- 
ment of all arrears, subject to satisfactory evidence of the sound bealth of the Insured it 
required by tbe Company's rules. 

8th, AlteEations and Waivers.— No person, except the President, one of the Vice 
Presidents or Secretary of the Company; can alter this contract or waive any condition 
thereof. 

9th. Limitation. — No suit on this Policy shall be i 
unless brought within six months next after the date of death, of tbe Insured. 

10th. Incontestability.— If tbe Insured shall die two or more years after the date 
hereof, and if all due premiums shall have been paid, aud full proof -of death given to the 



ntainable against tbe Company 



Company within three months next after the death of the Insured, this Policy shall be 
incontestable, except that the Benefits provided herein may be adjusted for misstatement 



At end of Twenty Years and of each Fifth Year thereafter If Policy Is continued in force. 



Uli.ce, 




eek, tb 


3 Cash fc 


urrendf 


r Value 


will b 


e three 


imes tb 


e amou 


t in thi 


9 table. 


nd BO 


on. 
























8 
4 
6 
« 
J 
8 
9 
10 
11 
12 
18 
14 
15 
10 

i; 

18 


End of 
20 


End of 
25 


End of 
30 

Years 


End of 

35 
Years 


End of 

40 
Years 


is 

19 
'20 
21 

23 
24 

26 
23 

28 

29 
30 
31 
32 
33 
34 
35 


End of 

20 
Years 


End of 

25 
Years 


End of 

30 
Years 


End of 

85 
Years 


End of 

40 
Years 


80 
37 
38 
31) 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
60 
61 
62 


End of 

20 
Years 


End of 

25 
Years 


End of 

30 
Years 


End of 

35 
Years 


EDd of 

40 
Years 


63 
64 

!-..; 

58 

59 
1 60 
, 61 

02 

03 

64 

65 

! 66 

; «' 

i 68 
69 
70 


20 
Years 


25 
Years 


End of 

30 
Years 


End of 

35 
Years 


40 
Years 




8 7.50 
8.00 
9.00 
9.50 
10.50 
11.50 
12.50 
13.00 
14 00 
11.60 
15.00 
15.00 
15.00 
14.50 
14.50 
14.50 
14.50 


Sll.60 
12.50 
13.00 
14.00 
15.00 
16.00 
17.00 
18.50 
19.50 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 
20.00 


S16.00 
17.00 
18.50 
19.50 
20.50 
22 00 
21.00 
24.50 
25.50 
26.00 
26.50 
26 50 
26.50 
26 50 
26.50 
26.50 
26.60 


522.00 
23.00 
24.50 
25.60 
27.00 
28.50 
30.00 
31.50 
33.00 
33.60 
34.00 
34.00 
34.00 
33.60 
33.60 
33.00 
33.00 


528.50 
30.00 
31.50 
33.00 
34.50 
36.00 
37.50 
39.50 
41.00 
41.50 
42.00 
42.00 
42.00 
41.60 
41.50 
40.50 
40.50 


515.00 
15.00 

15T00 

15 50 
15.50 
15.50 
16.00 
16.00 
16.50 
16.50 
17.00 
17.00 
17.00 
17.00 
17.00 
17.00 
17("00 


820.00 
20.50 
20.60 
21.00 
21.00 
21.50 
21.50 
21.50 
22.00 
22.50 
22.50 
22.50 
23.00 
23.00 
23.00 
23.00 
23.00 


526.50 
26.50 
26,50 
27 00 
27.00 
27.50 
27.50 
27.50 
28.00 
28.50 
2S.50 
28.50 
28.50 
28.50 
28.50 
28,50 
28.50 


833.00 
33.50 
33.50 
33.50 
33.50 
34.00 
34.00 
34.00 
34.00 
34.50 
34.50 
34.50 
34.50 
34.50 
34.00 
34.00 
34.00 


840.50 
40.50 
40 50 
40 50 
40.50 
40.50 
40,50 
40.00 
40 00 
40.00 
40.00 
40.00 
40.00 
39.50 
39.00 
38.50 
38.50 


817.00 
17.00 
17.00 
17.00 
16.50 
16.50 
16.50 
16.00 
16.00 
15.50 
15.50 
15.00 
15.00 
15.00 
14.50 
14.00 
13.50 


823.00 
23.00 
23.00 
23.00 
22.50 
22.50 
22.50 
22 00 
22.00 
21.50 
21.00 
20.50 
20.00 
20.00 
19.00 
19.00 
18.00 


828.50 
28.00 
28.00 
27.50 
27.50 
27.50 
26.50 
26.00 
25.50 
25.00 
24.50 
23.50 
23.50 
23.00 
22.00 
21.50 
20.60 


833.50 
33.00 
33.00 
32 00 
31.00 
31.00 
30.00 
29.00 
29.00 
28.00 
27.50 
26.50 
26.00 
25.50 
24.50 
24.00 
22 50 


537.50 
37.00 
36.50 
35 50 
34.50 
J4.00 
33.00 
32.00 
31.50 
30.50 
30.00 
29.00 
28.00 
27.50 
26.50 
25.50 
24.50 


813.00 
13.00 
12.00 
12.00 
11.50 
11.60 
10.50 
10.00 
10.00 
9.50 
9.00 
8.50 
8.00 
7.60 
7.50 
7.50 
7.00 
6.50 


817.50 
17.00 
16 00 
15.50 
15.60 
15.00 
13.60 
13 00 
12.50 
12.00 
11.50 
11.00 
10.50 
10.00 
10.00 
9.50 
9.00 
8.50 


820.Q0 
19.50 
18.50 
18 00 
17.00 
16.50 
15.50 
15.00 
14,00 
13.50 
13.00 
12.50 
12.00 


522.00 
21.50 
20.00 
19.50 
19.00 
18.00 
17.00 
16.50 


823.50 
23.00 
22.00 





Note.— To the Cash Surrender Value, as above, if applied for, will be added the Cash Dividend for the corresponding Five Year Dividend period, 1/ snch Dividend has not 
already been paid before this Policy is legally surrendered to the Company. Table of Cash Values after 40 years will be furnished on application. 
ino.— M.ss.— Foau cf 8-98. 



THE PRUDENTIAL INS. CO. OF AMERICA, l897-'98. 237 

by the policy. The circular enclosed herewith gives the amount of these 
Additional Benefits for the year 1897 in the case of policies on which five 
years' premiums have already been paid. You will observe that the Addi- 
tional Benefit on policies issued in 1892 is $1.40 for each $100 of insurance, 
and that the sum increases steadily with each additional year the policy is 
in force until, on policies which have been twenty-one years in force, the 
Additional Benefit reaches the sum of $5 per $100 of insurance. These 
amounts appear liberal when applied to individual policies, but the full effect 
and great expense involved in this concession can only be judged when we 
say that the Additional Benefits for 1897 are applied to a total of over 
$130,000,000 of insurance. You will observe that the Additional Benefits 
cease at the time the first Cash Dividend is paid, as the distribution of profits 
which will be made at that time may prevent the Company from declaring 
Additional Benefits thereafter. Under the second heading, 

"AFTER FIFTEEN YEARS— CASH DIVIDENDS," 

we find an agreement to pay to the insured a Cash Dividend on the policy 
after fifteen years' premiums have been paid and at the end of each fifth 
year thereafter. In other words, each policy hereafter issued will participate 
in profits on the Accumulative Dividend Plan, the first dividend being 
declared at the end of fifteen years, and the subsequent dividends at the end 
of each fifth year during the further continuance of the policy. 

We next find a paragraph headed 

"AFTER TWENTY YEARS— CASH SURRENDER VALUES." 

Here we find an agreement to pay, at the end of the twentieth and each 
fifth year thereafter, a definite cash value upon surrender of the policy. If 
you will examine the figures shown by the table on the back of the policy 
you will find that the values promised are much the same as those given 
under an Ordinary contract, thus proving the liberal tendency of The 
Prudential in adopting this feature in its new policy. 

We next find a paragraph headed 

"PAID-UP POLICIES— AFTER THREE YEARS." 

This condition provides for a Paid-up Policy according to the present tables, 
but we have omitted the tables from the back of the policy so that the new 
contract may not be obscured by too much type. The amounts of the Paid- 
ups, the period of the Expectation of Life, will be precisely as contained in 
present tables. You will notice, however, one important change, and that 
is that Paid-ups will be given under the new contract after the insured 
attains the age of 13 instead of age 15 as heretofore. 

RETROACTION. 

The foregoing concessions are so far-reaching and so entirely new in 
Industrial insurance that it becomes a serious problem as to whether they can 
be applied to existing policies ; and tne problem is complicated when the 



238 HISTORY OF THE PRUDENTIAL. 

immense amount of insurance in force at the present time — over three hun- 
dred millions of dollars — is considered. A concession on this vast sum of 
insurance of even $1 per $100 of insurance would be a matter of three 
millions of dollars. Under the new concessions we are brought face to face 
with much larger amounts. The application of the benefits given in the 
new policies to existing contracts must therefore, of necessity, become a 
matter of experiment and of experience, as the Company's entire business 
has been in the past. But, we will say that if experience proves that it is safe, 
the new concessions will be made applicable to old contracts as fast as the 
conditions will justify us. 

During the year 1897 Cash Dividends will be paid on policies issued in 
1877 and 1882, and Additional Benefits will be paid on all policies on which 
five years' premiums have been paid. The amount of the payment in indi- 
vidual cases under these two benefits will be found in the circular herewith. 

The table of cash dividends on policies issued in 1877 is made up of the 
amount declared for that year, plus the dividend of 1882. This is in keeping 
with the principle of the new policy, of paying the first dividend at the end 
of fifteen years, with an additional dividend at the end of each fifth year 
thereafter. 

You will observe that Additional Benefits, but for a reduced amount, will 
be paid on policies issued in 1877 and in 1882, even after the Cash Dividend 
has been paid. 

We hope to receive certain benefits in return for the important conces- 
sions which are herein announced. First of all we expect that the new 
policy will 

ENCOURAGE AGENTS TO REMAIN 

in the employ of the Company. The Agents can now offer inducements 
never before heard of in Industrial insurance. They can uphold these in- 
ducements by practical results. It will thus be easier to secure new appli- 
cations and to induce policy-holders to keep up their policies. Besides all 
the advantages coming from connection with the Industrial Branch, you 
will have the clear-cut, liberal policies of the Ordinary Branch to sell, 
backed up by the growth and actual results of that Branch in the past eleven 
years. No corps of Agents in this broad country — in fact, in the world — 
will have better or more liberal contracts to sell than the Agents of The 
Prudential Insurance Company. They will be in a position to insure the 
poor or the rich, giving each the best insurance that can possibly be ob- 
tained. Under such conditions as these, and with such opportunities, we 
believe our Agents will be very slow to leave our employ. We hope also to 
secure 

A LOWER LAPSE RATE. 

Our new policy is so designed that it becomes more valuable to the 
insured with each successive payment. 

We have dealt with our policy-holders with a degree of liberality which 
has never before been known in life insurance. * * * * It remains with 
our policy-holders to show their appreciation by keeping up their policies 



INCORPORATED AS A STOCK. COMPANY BY THE STATE OF NEW JERSEY. 




NUBA^ER 



Qj^ AMJBRTCa^- 



attovneO, 



CWviOwnt, 



PAID-UP LIFE POLICY. 

In Consideration of the Application for this Policy, and of the surrender of the former 

Policy, No , on the life of <~ , 

herein designated as THE INSURED, The Prudential Insurance Company of America hereby 
promises to pay, at its Home Office in the City of Newark, New Jersey, unto the executors, 
administrators or assigns of the Insured, unless settlement shall be made under the provisions 
of article second hereinafter contained, the sum of 

Bollard. 

within twenty-four hours after acceptance at its said office of satisfactory proof of the dea'th 
of the Insured. 

This Policy is issued and accepted subject to the following conditions and agreements: 



First — In case the age shall have been misstated in the original 
Policy for which this Policy is issued in exchange, the amount insured 
by this Policy shall be corrected to the amount that would have been 
granted if th~ age of the Insured had been accurately stated. 

Sbcond. — The Company may pay the sum of money insured hereby, 
to any relative by blood or connection by marriage of the Insured, or 
to any other person appearing to said Company to be equitably entitled 
to the same by reason of having incurred expense in any way on behalf 
of the Insured for his or her burial, or for any other purpose, and the 
production by the Company of a receipt signed by any or either of said 
persons, or of other sufficient proof of such payment to any or either of 
them shall be conclusive evidence that such sum has been paid to the 
person or persons entitled thereto, and that all claims under this Policy 
have been fully satisfied. 



Third. — The Insured may serve in the Militia or in the Army or 
Navy of the United States, in time of peace or for the purpose of pre- 
serving order in case of riot ; but in time of war, a written permit for 
such service must be obtained from the Company and an extra premium 
paid. In case of the death of the Insured from service in war without 
such permit, the liability of the Company shall be limited to the net 
reserve on this Policy computed according to the legal standard of the 
State of New Jersey. 

Fourth. — No suit on this Policy shall be maintainable against the 
Company unless brought within six months after the date of death of 
the Insured. 

Fifth.:— If. full proof of death is given to the Company within three 
months next after the death of the Jnsured, and if ttje foregoing con- 
dition as to occupation shall have been complied with, this Poficy shall 
be incontestable, except that the sum insured may. be adjusted for flUs^ 
statement of age. 



In Witness Whereof, the President and Vice President of 
said Company nave signed these presents at its Home Office in the City of Newark, New 
Jersey, this day of 189 




ffi&ftJ^ 



Vice President. 



f yf President. 



INDUSTRIAL— Paid-up Life. Form of 1-m. 



PAID-UP POLICY FORM AT PRESENT IN USE BY 
THF, PRUDENTIAL. INSURANCE COMPANY OF AMERICA. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1 897-98. 239 

and continuing their confidence in the Company. If these expectations are 
realized, we shall consider that we have received our reward for the conces- 
sions herein set forth. 



It is hardly possible to exaggerate the far-reaching value of 
these additional voluntary concessions made by The Prudential 
Insurance Compan}', and it was well stated in The Prudential 
Weekly Record of January 4, 1897, that " From its inception The 
Prudential has never neglected the lesson taught by its own experi- 
ence. And so to-day the Company issues this new contract and 
makes these additional concessions to its old policy-holders because 
the experience gained in the past twenty-one years shows that 
such improvements are practical and safe." And it could be 
said with perfect truth that, ' ' for simplicity and liberality to the 
insured, the new Industrial policy has never been approached by 
any Industrial insurance company in this country or abroad." 
With equal justice the Company could speak of this step in advance 
as ' ' co-operation ' ' in the true sense of the word, and of Industrial 
policies as ' ' profit-sharing contracts, ' ' practically identical with 
policies issued by Ordinary life companies, placing the man 
paying a five-cent premium on the same level, as regards benefits 
and liberal surrender provisions, as one paying a premium of 
$5,000 annually. For five cents a week a Prudential Industrial 
policy provides at present not only for the contingencies of the 
future, but also offers a legitimate reward for the present, because 
by its terms an equitable distribution of the profits accruing from 
this small investment is made in the numerous ways referred to 
in Mr. Dryden's letter. The financial aspect of so far-reaching a 
step in advance may fairly be appreciated when it is stated that 
the cost of the voluntary concessions made by The Prudential 
Insurance Company to its Industrial policy-holders to January 1 , 
1897, was approximately $700,000, representing, however, but a 
small fraction of future obligations incurred voluntarily by the 
Company. 

Among numerous improvements made in the agency admin- 
istration of the business, one of considerable importance deserves 
to be mentioned. Under date of January 2, 1897, the Vice- 
President of the Company informed the field force that — " For 
some time past we have experimented with medical inspections, 
and, finding the plan successful, it has been determined to extend 



240 HISTORY OF THE PRUDENTIAL. 

the system." The method of medical inspection was briefly out- 
lined in a circular letter of the Medical Director to the Company's 
Medical Examiners, from which I make the following extracts : — 

A medical inspection is satisfactory when the following conditions are 
fulfilled :— 

i. You should personally see the applicant. 

2. You should give as near as you can his [or her] correct age next 
birthday, regardless of any statement made on the application. 

3. You should state to the best of your judgment his [or her] present 
condition of health. 

4. You should ascertain if he or she has signed ithe application and paid 
the premium. 

Remember that, whenever you are requested to make an examination, 
an inspection will not answer. There is a decided difference between an 
inspection and an examination. In an inspection, judgment is given from 
the appearance of the individual as well as from answers to inquiries that 
may be made. In an examination the party is not only asked certain ques- 
tions, but the Examiner is expected to ascertain by percussion and auscul- 
tation the condition of the heart, lungs and abdominal viscera. 

Under this practice all adult applicants are now either med- 
ically inspected or examined, and the former opportunities for 
adverse selection have, therefore, been correspondingly dimin- 
ished. 

Among other changes and improvements in the practice 
of the Company, a new form of application was issued this year, 
which is reproduced on the opposite page. The only material 
alteration in the application was in reference to the signature 
of the parent or guardian of the person to be insured, if applicant 
was under the age of fifteen next birthday. The application 
reproduced is the one at present in use by the Company. 

A new ' ' Manual of Instructions ' ' was issued to the field 
force, the essentials of which are summarized in the following 
brief rules for agents, illustrating the systematic and thorough 
manner in which the field operations of the Company are con- 
ducted : — 

1. Collect promptly and systematically during the first part of each 
week. Collect at least one week's premium at the time of writing an appli- 
cation. 

2. Write up your account and transmit your cash on time. 

3. Report for lapsing all policies four weeks in arrears. 

4. Canvass persistently and methodically. 



Form 1. 



INDUSTRIAL BRANCH. 



AGEFL. 



POLICY Ho. 



Ass't 
Sup't. 



Fob Officb Use. 



District 

APPLICATION 

FOR INSURANCE IN 



Fob Office Usb. 



| The Prudential Insurance Company of America* 



> 
< 






HOME OFFICE, 


NEWARK', 


N. J 












estions to be answered by the person whose life is proposed for insurance if age is 15 years NEXT birthday or 
over, but, if younger, by the Parent or Guardian. 


o 
o I. 

> 
< 


FULL N A HE OF PERSON TO BE 1>SI RE D 1 


2. HED. 

At o'clock, A. St., 1 


EX. CALL 

». M.. on 






I 
Ir 
o 
z 


No. 


Street. 


Town. 


Floor. 


Front or Rear. 


Right or Left. 


< 

uT 
o 
EC 


3, DATS OF BIRTH 1 

Month. Day. Tear. 


4. AGE NEXT BIRTHDAY I 


5, AMOUNT OF INSURANCE) 
$„ 


6. WEEKLY PREstrum? 
_.cfa. 






ui 7. 

s 
o 

X 


PLACE OF BIRTH 1 

(State or Country.) 


8. RACE t 

(White or Colored.) 


9. SEX 1 


10. MARRIED OR SINGLE t 
(If Adult.) 


II, OCCUPATION I 
(Omit for lives less than 13 years.) 



X,2. 



Is life proposed now in- 
sured in this Company ! 
I f so, state numbers and 
amounts of Policies. 



.Is life proposed now 
i insured in any other 
Company ' If so, for 

what amount! 



Has life proposed ever been 
rejected or postponed by 
this or any other Company ! 



If so, by what Company t 



1 4-. 



a. What is the present con- 
dition of health ! 



When last sick ! 
Month. Tear. 



Of what Disease I 



Does any physical or mental 
defect or infirmity exist ! 



15. 



Height and Weight ! 



..ft.. 



-in. 



~lbs. 



16. Has either Parent or any 
Brother or Sister died of 
Consumption t 



17. Does Rupture exist ? 



18. Is spirituous liquor 
used! 



Is opium or any 
narcotic used I 



Has life, proposed ever suffered from Consumption, 
Asthma, Spitting of Blood, Habitual Cough, Apoplexy, 
Paralysis, Heart Disease, Insanity, Fits or Convulsions, 
Rheumatism, Disease of the Liver or Kidneys, Cancer, 
Ulcers or Accident of any kind ! 



State what disease. 



I HEREBY APPLY for insurance for the amount herein named, and I declare and warrant that the answer* to the above questions are complete and true, 
and were written opposite the respective questions by me. or strictly in accordance with my directions. I agree that said answers, with this declaration, shall form 
the basis of a contract of insurance between me and The Prudential Insurance Company of America, and that the policy which may be granted by the Company 
in pursuance of this application, shall be accepted subject to the conditionsand agreements contained in such policy. I further agree that no obligation shall exist 
against said Company on account of this application, although I may have paid premiums thereon, unless said Company shall issue a policy in pursuance thereof, 
and the same is delivered to me. 



tr Signature of Applicant. 

Oj To be made by the person whote 
*t life it to be trmred if is yean 
v old NEXT birthday, or oter, hat, if I 
*jj fovnger, by the rarent or Guardian, 

< 

<2 Witness. 



APPLICANT'S MARK NOT ACCEPTED IF ABLE TO WRITE. 



Dated this. 



jday of~. 



Stale relatumehip of per ton vi*> 
eijtu, iflifepropoeedit lese Mam 
IS yeare old NEXT birthday, 

189 



AGENTS CERTIFICATE. 

This certificate must In all cases be signed by the Agent himself after ths above questions an all answered, aad he has become satisfied that the. life proposed 
Is a first-class risk, and also by the Assistant Superintendent If application was secured by one. 



A. Is the Applicant a 
relative of yours? 



State relationship. 



B. 



What amount of Premiums 
have you collected In advance ?.. 



/ CERTIFY that I have this.. 



.day of_ 



u the Applicant herein named, and I recommend the Companp to accept the- Hat. 



_189 , personally seen and questioned 



Assistant 

Ssperintfudent.. 



s£ If a policy is already In force in this Company on life proposed, and this application is for additional Insurance, the policy must be s«nt to the Home Office 
attached to the application, which should be marked in ths left hand margin "ADDITIONAL." If application is for Increased or decreased Insurance, and ths 
-existing policy Is to be Ispsed^a lapse schedule containing particulars of the policy a* well as ths policy itself must be attached to the application. 



INDUSTRIAL APPLICATION FORM AT PRESENT IN USE BY 
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 



JVIedieal E^atnliieir's I^cpoft. 

To be filled in by a regularly appointed Medical Examiner, when the amount applied for is $260 or more. 
OBSERVE FOUR IM 
PORTANT POINTS: 



I. A PERSONAL EXAMINATION. 
2. THE AGE NEXT BIRTHDAY. 



3. THE CONDITION OF HEALTH, 

4. APPLICANT'S SIGNATURE BELOW. 



I . Is question 19, on the other 
side, answered correctly f 



5, Height and Weight! 
(If over 15 years of age.) 



9. Has either parent, or a 
brother or sister died of 
Consumption ! ' 



2. Does the date of birth given 
to you agree with that given' 
to Agent! 



6. Does the applicant appeal' 
to be In good health! 



3. What do you believe to be 
the age next birthday ! 



4, KaceT (White or Colored.) 



7. Is there any physical defect 
or infirmity f 



8. Has the applicant ever been 
rejected by this or any 
other Company ! 



JO. Have you reason Xo suspect 
intemperate habits, or, If 
female, immoral life! 



II, Has applicant within the past five years had anv serious 
Illness or injury: Spitting Blood, Habitual Cough* etc.! I£ 
yes, give date and particulars below. 



12. Is the Heart diseased I 
\ 



13. Are the Lungs diseased ! 



14. Do you detect disease of any kind ! 



15. Have you personally examined 16, When! 

the applicant i Day Month Year 



17. "Is the life, in your opinion, a first-class, fair average, 
or poor risk ( 



u. REMARKS: Use this space for full particulars, if required. 



H Signature of party examined, or, 
Z if too young to write, of person 
2 applying for Child's Insurance. 



or, I 

on y 

\ 



§ I CERTIFY, that the above ans7cers are true ani 
j that the person examined signed in my presence. 



.M D. 



jVTEDICnU EXAMINEE'S INSPECTION REPORT. 

To be filled in by a regularly appointed Medical Examiner, when the amount applied for is less than 8250. 



er OBSERVE FOUR IM- 

O 

ft PORTANT POINTS- 



I.- A PERSONAL INSPECTION". 
2. THE AGE NEXT BIRTHDAY. 



3. THE APPARENT HEALTH. 

4. THE APPLICANT'S SIGNATURE. 



uj A. What do you believe to be the actual age 

|Jj NEXT BIRTHDAY ! 



B. IS THERE ANY REASON TO 8U8PECT INTEMPERATE HABITS, 
OR, IF FEMALE, IMMORAL UFE I 



< C. RACE! (WHITE OR COLORED. ) 

> 
_l 

r- 



D- Has applicant ever been rejected r 



E. Did applicant sign thi» application 

ON OTHER 8IOE! 



tC F. DlDYOU PERSONALLY SEE APPLICANT; 



Q When f 

Day Month Year 



H. Does applicant appear to be in good health! 



5 I. Was premium paid to agentt 



J. DOE8 APPLICANT INTEND TO CONTINUE THIS INSURANCE! 



^ REMARKS 

a 



r- Sionature of party i ) 
t* spected. or, if a child, Of r 
i_ parent or guardian. \ 



[{{ / CERTIFY, that the above answers are correct 
ta and that applicant signed in my presence... 



jr. d. 



Medical Examiner. 






THE PRUDENTIAL INS. CO. OF AMERICA, l897~'98. 241 

5. Correctly represent the insurance you offer, and write applications 
only on lives you believe to be in good health and of temperate habits.* 

6. See all applicants personally, and be careful to get correct age next 
birthday. 

7. Permit no application to leave your hands until it has been signed 
by the applicant in your presence and until it is complete in every detail. 
If previous insurance exists, attach first policy to application and forward for 
endorsement. 

8. Hand in your applications as early in the week as possible. 

9. Do not deliver a policy unless you are certain the insured is in good 
health at the date of delivery. 

10. Read your "Instruction Book"; consult your "Assistant"; study 
the forms you must use ; learn the requirements of your office and your 
duties as a correspondent. 

A further change in the agency administration was touched 
upon in a letter of the President to the field force dated January 29, 
1897, in which the agents were informed that ' ' in view of the very 
gratifying reduction in defalcations during the year 1896 we have 
been enabled to make better arrangements with the American 
Surety Company for bonding our agents. It, therefore, affords 
us pleasure to announce that during the present bond year — - 
February 1, 1897, to February 1, 1898 — we shall only require $1 
for an agent's bond, instead of $2 as heretofore, and no charge 
will be made to agents who are members of the Old Guard. ' ' 
This concession to agents is proof of the increasing efficiency of 
the field force, and the high character of the men employed, 
and it may be added that in another year the Company saw its 
way clear to do away with bonds and sureties entirely, resting 
its guarantee of honest and efficient management on the part of 
its agents on the fact of previous good character and the sub- 
stantial inducements for men to remain honest in a business 
pursuit assuring to the agent a satisfactory income during 



* Regarding this point the Agents' Instruction Book reads as follows : — 
"All persons applying for insurance must be seen personally, and 
questioned as to their age, health, habits, etc., in order that the Agent may 
be able to judge for himself whether they are desirable risks or not. The 
performance of this duty by others does not release him from the responsi- 
bility of personally certifying to the truth of the statements made in the 
Agent's Certificate, which must in every case bear his signature. 

' • Under no circumstances are you to canvass or submit Applications 
from persons of immoral habits or inmates of houses of ill fame." 



242 HISTORY OF THE PRUDENTIAL. 

the proper performance of his duties. The position of the 
Industrial agent had also been materially improved through 
changes introduced by the Company in the management of its 
Ordinary business, by doing away with the separate management 
of the Ordinary department, and making out of its Industrial 
agents Ordinary insurance producers. In communicating this 
change to the field force under date of February 10, 1897, the 
President wrote as follows : — 

It is now and always has been one of the aims of The Prudential to make 
the stay of every Agent in the force a permanent one. The Company is 
averse to losing the services of good representatives, and has from time to 
time instituted such changes in its business policy and in the terms of 
remuneration to Agents as tended to insure their retention. We have been 
successful in a large degree with hese measures, but the Company's idea is 
to make continuous advance in che matter and we now propose taking a 
step far in advance of anything yet done. 

We shall make a contract with each Agent covering not only the Indus- 
trial but Ordinary business as well, so that an Agent devoting himself to both 
departments of the work will gain a double advantage from his labors. 

The commission on Ordinary business during the first year, and the 
renewal interest afterward, will make gratifying additions to the income 
secured from the Industrial business. This action of The Prudential places 
each member of the Agency staff on practically the same level of position 
as the General Agents of other companies, but with greater opportunities for 
writing and holding business. Under the plans of the Company you are 
able to offer profit-sharing policies of life insurance for the whole of the 
family — men, women and children. 

The new Industrial contract is so much like an Ordinary one as to enable 
you to appeal to people who have hitherto held aloof from Industrial Insur- 
ance, and in canvassing for the one the opportunity for presenting the merits 
of the other is bound to come. 

Having once determined to make radical changes in the 
policy conditions of its Industrial business, the Company still 
further liberalized the Industrial contract by granting a revival 
privilege to lapsed policy-holders, under which policies could be 
reinstated without the payment of arrears, such unpaid premi- 
ums being made a non-interest-bearing lien upon the policy, pay- 
able only in case of the death of the insured. The subject is 
fully set forth in the President's letter to the field force dated 
January 30, 1897: — 

We have decided to make yet another concession, to go into effect for 
the week of February 8th, to policy-holders who have been unable to con- 
tinue the payment of premiums. We believe that there are instances where 



THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

HOME OFFICE, NEWARK, N. J. 



AGENCY APPLICATION AND AGREEMENT. 

REPORT 0F SUPERINTENDENT. 



Applicant's full name _ __ 

To operate at. 

I. Did you personally interview the applicant? 2. Did applicant respond to an advertise- 
ment, come to the office unsolicited, or was he introduced by an Agent or Assistant? _. 

3. What is his general appearance? 

4. Does he reside at the address given in Agency Application ? _ 

5. Is residence in respectable neighborhood? (To be ascertained by personal visit) _ 

_ _ _ 6. Is applicant married or single ? _ _ 

7. Is applicant a resident of a boarding-house, does he rent rooms or house, or does he own his own 
home? _ 

8. From your personal visit to last employer what recommendation does he make ? ( Not to be answered 
where applicant was employed by any other Industrial insurance company) _ _.., 



9. Did you personally visit the other references, and what recommendations do they make ?.. 



10. Has Agent been provided with Manuals of Instruction ?. 

11. Does he propose devoting his whole time to the business? „ If not, state what other occu- 
pation he intends following _ _ _ 

Assigned to Ass' t Sup' t _ 

_..._ _ _ Sup't. 

PERSONAL STATEMENT BY THE APPLICANT. 

THIS STATEMENT MUST BE FILLED IN, DATED AND SIGNED BY THE APPLICANT HIMSELF. 

RECORD OF EMPLOYMENT FOR FAST FIVE YEARS : 



NAME OF EMPLOYER 


DATE OF SERVICE 


ADDRESS 


KIND OF BUSINESS 


(last employer) 


FROM TO 








FROM TO 








FROM TO 








FROM TO 







REFERENCES : 



OCCUPATION 



Were yoi ever employed by tnis Company ? _ If so, 

state wnen ? l 



Wnat capacity. 



Way Aid yon leave our employ 



Dated this.. 



fere you ever employe! by any other Industrial Co.?._„ II 

so, state wnat Company, _ 

Ben _ 

Where _ _ 

YTnat capacity _.._ _ _ 

Wny did yoi leave its employ 



.Agent. 



..-day of... 



../go. 



INDUSTRIAL AGENT'S AGREEMENT AT PRESENT IN USE BY 
THE PRUDENTIAL, INSURANCE COMPANY OF AMERICA. 



AGENT'S AGREEMENT, 



In consideration of my appointment as an Agent of The Prudential Insurance Company of 
America, I do hereby agree as follows : 

THE FOLLOWING CLAUSES RELATE ONLY TO BUSINESS KNOWN AS INDUSTRIAL INSURANCE. BEING THAT 
ON WHICH THE PREMIUMS ARE PAYABLE WEEKLY. . 

i. To canvass for insurance and to collect premiums regularly every week. To keep true accounts as 
to the business in such books as may be provided by the Company, and to make, on the day required and 
on the forms provided by the Company, each week a true account of all moneys received by me, and to 
remit at the same time all moneys whatever received by me. 

2. To fill in and return to the Home Office each week on a Lapse Schedule provided by the Company, 
a list of all the policies upon which four weeks' premiums are due. 

3. That on Monday of each week I am to be debited with the amount of the weekly premiums shown 
on the Life Policy Register, less the total amount of the weekly premiums on policies entered in the 
Lapsed Policy Register for that week ; and it is agreed that the Company is not bound to prove that I have 
received the premium from each particular policy-holder, but that the amount so shown shall be considered 
as being absolutely received by me on behalf of the Company. This clause is not to be construed as a 
waiver of or interfering with any rights secured to the Company by this agreement in any other respect. 

4. That in case of my resigning the Agency, or of my being dismissed therefrom, I agree to introduce 
to my successor in the Agency all the policy-holders in my Agency after such resignation or dismissal, 
upon being requested so to do by the Company. 

5. That " Official Transfer," as used herein, means the transfer on the Company's books at the Home 
Office of policies to or from my Agency during and after my term of service with the Company. 

6. That in case any policy or policies in my Agency become lapsible under the Company's rules, 
through default in payment of premiums, and I fail to report such policy or policies to the Company for 
lapse at the time specified in said rules, the arrears in excess of the amount regularly allowed by the Com- 
pany are to be charged to my account. 

7. That I am to receive a salary amounting to 15 per cent, of the amount of my collections each week, 
said salary to be known as " Ordinary Salary." 

8. That in addition to the amount specified in clause 7 a "Special Salary" is to be paid to me, 
amounting to fifteen times the net increase of my collectible weekly debit. But should a decrease in the 
amount of my weekly debit occur, a charge of fifteen times the amount of such decrease is to be made 
against my account, which charge can be offset by the production of further net increase in debit or by 
payment of fifteen times the amount of the decrease in cash. 

9. To furnish to the Company, if required, a bond, in form and substance as prescribed by the Com- 
pany, to secure the faithful performance of duty on my part as Agent and with such surety as shall be 
approved by the Company. 

10. It is expressly agreed that I am not to be entitled to any Ordinary or Special Salary until all the 
conditions and agreements contained in this contract have been fully complied with by me. 

11. That the amount of the collectible weekly debit is arrived at by deducting the total amount of the 
weekly premiums on all policies entered in the Lapsed Policy Register from the total amount of the 
weekly premiums on all policies entered in the Life Policy Register. 

12. Should business of any description be transferred to me, no Special Salary is to be paid on the in- 
crease in my collectible weekly debit resulting from such transfer, but only on the amount of net increase 
shown after deducting the amount transferred, and such transferred business, if subsequently lapsed, will 
not affect my Special Salary if reported by me for lapse at such time as to admit of the official lapsing for a 
date within the period prescribed by the Company's rules. 

13. Should business of any description be transferred from my Agency, the decrease in my collectible 
weekly debit resulting from such transfer is not to be charged against my Special Salary, provided the 
business becomes chargeable, under this agreement, to the Agent to whom it is transferred. It is, however, 
expressly agreed that all policies officially transferred from my Agency, either during my term of service 
jrith the Company or after the termination of my employment by resignation, dismissal or otherwise, and 
reported for lapse at such time as to admit of the official lapsing without charge, under the Company's rules, 
against any Agent who has received the transfer of the policies, shall be charged against my account at the 
regular Special Salary rate of fifteen times the amount lapsed. 

14. That if any business is transferred from my Agency, and it is again transferred before the Agent who 
received it from me has held it long enough to become chargeable with it under this agreement, I am to be 
held responsible in case of its lapse, unless some one of the Agents who received it in transfer has retained 
the business long enough to become chargeable with it under this agreement. 

15. That I am to be allowed to draw Special Salary only to the amount the character of the new busi- 
ness, after investigation, will in the opinion of the Company warrant. 

16. That if my weekly collectible debit should decrease in any week, and I should subsequently claim 
salary on any future increase of business, it will only be payable upon the net increase from the last date 
the Special Salary was allowed. 

17. That should the arrears on my account be deemed excessive by the Company or my collections below 
the percentage of the debit prescribed by the Company's rules the Special Salary may be withheld until 
the rules are complied with. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1 897- 98. 243 

the parties formerly insured would like to have the original policies rein- 
stated or revived, but lack the necessary funds to pay up the arrears. 

Until further notice, the following concession will apply in such cases : 
In the event of the insured under policies on which 52 or more contin- 
uous premiums were paid, prior to lapse, desiring to revive the policies, 
the Company will, if the applicants are unable to pay the whole arrears, 
accept a policy lien (which will not call for payment of interest) for the 
whole of arrears, if necessary, or for such part as they are unable to pay at 
the time of applying for revival. This concession applies only to policies 
13 or more weeks in arrears at time of application for revival. These 
policy liens may be cancelled during life-time by the insured, through pay- 
ment of the sum due the Company. They will form liens upon the policies, 
and the amounts represented shall be deducted from any payment becoming 
due under the policies. They will also form liens upon the legal reserve to 
the credit of the policies and may be deducted therefrom, before considering 
any paid-up insurance to which the insured might otherwise be entitled, in 
the event of the policies revived being subsequently lapsed. You can ap- 
preciate that this concession means a great deal to those interested, and we 
believe it will be warmly welcomed by many of those who were obliged to 
discontinue their insurance in The Prudential. 



The form used in case of policy liens on lapsed contracts is 
reproduced as follows : — 

INDUSTRIAL POLICY LIEN. 

Policy No 189 

The undersigned has applied to The Prudential Insurance Company of 

America for a revival of Policy No. , on the life of 

, issued by said Company, and 

acknowledges that the arrears of premiums on said policy amount to 

dollars and cents, and 

agrees that in event of the revival by said Company of the said policy, the 
said amount will be a lien on said policy and will be deducted therefrom 
if said policy becomes a claim. 

Should a paid-up policy be issued in lieu of the above mentioned policy, 
the said amount of arrears of premiums will be deducted from the legal 
reserve to the credit of said paid-up policy, or any dividend additions or con- 
cessions that may hereafter accrue on said policy may be applied, at the 
option of the Company, to cancel or reduce the amount of this lien. 

It will readily be granted that the Company, in taking 
these important steps, had practically extended to Industrial 



244 HISTORY OF THE PRUDENTIAL. 

policy-holders the loan privileges of Ordinary policy-holders, 
subject to certain modifications on account of elements inherent 
in the practice of Industrial insurance. 

Every possible effort had been made by the Company to 
encourage lapsed policy-holders to revive their policies or to 
assist those in arrears to keep their policies in force. Special 
instructions had been issued to agents from time to time, insist- 
ing upon special efForts to keep policies in force in cases where 
policy-holders had fallen in arrears, and from an article on the 
subject in The Prudential Weekly Record of August 9, 1897, I 
make a few extracts to illustrate the anxiety of the Company 
with reference to policy-holders in distress : — 



A number of complaints have been made of late to us by policy-holders 
as to the arbitrary methods adopted by the Agents and Assistant Superin- 
tendents in reference to collection of premiums in arrears. 

The Prudential has builded its business upon good business principles, 
and one of these is the insistence that courtesy be shown to all connected 
with it. The Company recognized from the beginning of its career that 
occasion would arise when the policy-holders might not, for sufficient rea- 
sons, be able to meet the payment of premiums regularly, and provision 
for such contingency was made. 

When policy-holders fall in arrears, point out the danger to them and 
try to have the premiums paid up. Do not, however, display harshness. 
Accept premiums within the limit. 

We do not complain if old policy-holders are a little behind. They will 
catch up when they can, and if properly treated will clear up the indebted- 
ness at the earliest opportunity. 

Educate the policy-holders in the matter of paying premiums — start 
right with them ; use tact, good judgment, courtesy — and there will be no 
complaints. 



To further encourage lapsed policy-holders to revive their 
policies, a new rule was introduced, under date of February 19, 
1897, under which the Company assumed the expense of medical 
re-examination in all cases of revivals. Previous to this it had 
been the rule to have the insured pay the cost of the second 
medical examination, and occasionally cases had occurred where 
the expense had been a bar towards reinstatement, and, rather 
than place even so slight a hindrance in the way of policy re- 
vivals, the Company assumed the entire expense of such medical 
re-examinations. 



THE PRUDENTIAL INS. CO. OF AMERICA, l897-'98. 245 

An Intermediate policy was issued for the first time in 
1 897 in place of the former Special Adult policy, which had been 
discontinued under date of January 1st, in view of the fact that 
the new concessions to Industrial policy-holders were of more 
value than the slight reduction in rates which had been the feat- 
ure of the Special Adult table. In communicating to the field 
force the views of the Company on this additional innovation, 
the President stated that — 

It is our purpose to issue Intermediate Policies in our Ordinary Branch. 
These policies have been prepared to meet a demand which exists for plans 
of insurance adapted to the requirements of people who, by reason of 
physical excellency, personal and family history, financial condition, occu- 
pation, habits and environment, feel that they should be insured on terms 
somewhat more favorable than those of the regular Industrial policies. We 
expect, therefore, that our representatives will carefully select the risks they 
place before us for these Intermediate Policies, and aim to get only those who 
are more nearly up to the Ordinary rather than the Industrial standard. 

We wish it clearly understood that these policies are not intended for 
purely Industrial risks. We will not accept applications for Intermediate 
Policies on persons engaged in the manufacture or sale of intoxicants,* or 
from those employed in an establishment where explosives are manufactured. 

The premiums on these policies will be payable quarterly, semi-annually 
and annually, and will be the same for both men and women. 



* This class of risks is accepted in the Industrial department, subject 
to certain restrictions, as stated in the following extract from the Agents' 
Instruction Book : — 

Saloon-keepers, bar-tenders and persons engaged in the sale of intox- 
icants will not be insured for more than $250 or thereabouts, and in all cases 
the age will be rated up five years. The Company does not wish any par- 
ticular effort made to get business of this class, but if applicants are taken, 
five years must be added to the actual age, and the amount of benefit for 
the higher age must be quoted. The highest premium accepted from per- 
sons engaged in this occupation at the various ages is shown below : — 



Actual Age. 


IvIMIT OF 

Weekly Premium. 


20 to 26 inclusive, 


15 cents. 
20 cents. 


27 to 34 " . . 

;j: to ?Q " . . 






25 cents. 
30 cents. 
35 cents. 
40 cents. 
35 cents. 




4^ to 47 " 


48 to SQ " 


60 to 65 ■" 



246 



HISTORY OF THE PRUDENTIAL. 



An abbreviated copy of the Intermediate table is given 
below : — 

PREMIUM RATES FOR A POLICY OF $500. 
Whole: Life. 





Annual 


Semi-Annual 


Quarterly 


Age Nearest Birthday. 


Premium. 


Premium. 


Premium. 


20 


$IO 97 


$5 70 


$2 91 


25 


12 55 


6 53 


3 33 


30 


14 22 


7 39 


3 77 


35 


16 42 


8 54 


4 35 


40 


19 02 


9 89 


5 04 


45 


22 52 


11 71 


5 97 


50 


27 28 


14 19 


7 23 


55 


33 77 


17 56 


8 95 



It will be observed, on examination of the extract from the 
President's letter, that applications for Intermediate policies were 
not to be accepted from persons engaged in the manufacture or 
sale of intoxicants or the manufacture of explosives. Many- 
other dangerous or unhealthy occupations were, however, also 
prescribed against in the regular instructions sent to agents in 
reference to this class of policies. Among others, applications 
were not to be accepted from coal-miners, potters, asbestos 
workers, caisson workers, cement-mill employees, glass-blowers 
and gatherers, match-makers, mirror-makers, rubber-makers, 
smelters, starch workers, white-lead workers, etc., etc. These 
restrictions were based entirely on the then existing state of 
knowledge as regards the accident and disease liability of men 
employed in various occupations, and they have been subject to 
important modification as subsequent investigations have made a 
less restrictive practice possible. Thus, for instance, in conse- 
quence of a thorough investigation of the facts pertaining to men 
employed in American coal-mines, native coal-miners, on account 
of their lesser liability to fatal accidents, have been removed from 
the list of prohibited occupations. A similar investigation into 
the mortality of potters brought to light many previously un- 
known facts, on the basis of which it was possible to accept the 
larger proportion of men employed in this occupation. On 
account of the large number of lives under observation in the 



THE PRUDENTIAL INS. CO. OF AMERICA, l897~'98. 247 

Industrial department, The Prudential has gradually accumu- 
lated a body of exceptionally valuable facts pertaining to the 
mortality of persons in different occupations, and in the light of 
its own experience it will be possible in the future, as it has been 
in the past, to make most important modifications in the method 
of dealing with applicants engaged in dangerous or hazardous 
occupations, and possibly with a class of sub-standard lives, now 
under special observation by the Medical department. 

The Company this year lost by death the service of another 
faithful employee, Mr. Thomas Haggart, Superintendent of the 
Denver District. I quote the following brief biographical sketch 
from The Prudential Weekly Record of September 27, 1897 : — 

With great regret we are obliged to announce the death of Super- 
intendent Thomas Haggart, of Denver, Col. 

Mr. Haggart's career in the Industrial insurance business has been a 
notably successful one, and we can, without any exaggeration, say that in 
his death the Company loses one of the most faithful, loyal and progressive 
men in its entire service. 

He was a typical field man ; nothing suited him better than the varied 
and arduous work of carrying on a superintendency. 

He took the keenest delight in overcoming obstacles and difficulties ; 
in personally assisting and helping those of his Agents and Assistants in 
trouble. 

Mr. Haggart entered the service of the Company on September 8, 1882, 
and among the last things he was able to do was to sign for his gold medal 
for fifteen years' continuous and honorable service. 

Those of the older men in our service who had the privilege of knowing 
Mr. Haggart will fully appreciate the loss we have sustained, and, while we 
were prepared for it, through the long illness that preceded his death, yet 
the removal of so prominent a figure in our field operations comes as a 
shock to one and all. 



The results of the business operations during 1897 had been 
very satisfactory. The Industrial policy-holders now exceeded 
2,658,000, while the policy-holders in the Ordinary department 
numbered 52,583. The assets had increased to $23, 984,000, and 
the liabilities to $1 8, 744,000, leaving a surplus of $5,240,000. 

In commenting upon the progress made by the Industrial 
companies during the year, the Baltimore Underwriter referred 
to Industrial insurance as " one of the wonders of the age," and 
from an article of some length I make the following extracts as 
an indication of the increasing appreciation of this form of 



248 HISTORY OF THE PRUDENTIAL. 

insurance on the part of those best qualified to judge of its value 
from the standpoint of public policy : — 

Industrial insurance has become one of the wonders of the age. The 
period of its active development in this country dates back only twenty-one 
years, yet the capabilities of the accretion of diminutive payments — five and 
ten cents a week — would be incredible were not the demonstration con- 
stantly placed before us. 

What it has wrought in such a brief period along the lines of thrift and 
saving, what it is doing from day to day in the alleviation of sorrow and 
misery in the homes of the poor and the lowly, the children of toil and pri- 
vation, we shall never know ; we can only faintly conjecture. It is hard to 
realize that in this wonderful business more than seven million policies are 
in force, that in its work of benefaction it is paying out fifteen millions of 
dollars annually, and that it gives employment to more than thirty thousand 
agents. 

It is doubtful whether, in the entire history of life insurance, 
any other single year represents efforts and results destined to 
bring about such vast and permanent improvements as must 
naturally follow The Prudential's policy of liberality outlined 
during 1897. In his annual review Mr. Dryden touched upon 
these points in his letter to the field force as follows : — 

The year 1897 will be memorable in the history of Industrial Insurance, 
because in that year The Prudential Insurance Company inaugurated a 
new era by issuing an Industrial policy containing Cash Dividend and 
Insurance Dividend [Mortuary Dividend] features and promising liberal 
Paid-up and Cash-Surrender Values, — a policy hitherto unknown in the 
Industrial Field. The magnificent amount of insurance written during the 
year just past, without any extra effort on the part of the Field Staff, is 
sufficient evidence that these great concessions have been appreciated by the 
insuring public. 

The year 1897, however, was marked by still greater liberality on the 
part of the Company, in that the concessions to the new policy-holders, as has 
always been the practice of the Company, were made to apply [equally] to its 
old policy-holders. Liberal Cash Dividends were paid on policies issued in 
1877 and 1882, and Additional Benefits in case of death were paid on all policies 
on which five or more years' premiums had been paid. In every instance 
these dividends have been a voluntary concession — not promised by the 
Company, not expected by the policy-holder. At the time these policies 
were issued, the fact of their eventually earning for their holders substantial 
dividends was wholly unlooked for. 

We have studied very carefully our experience as regards these divi- 
dends during 1897, and now believe that we can safely offer a similar con- 
cession for the year 1898. In 1897 the Cash Dividends applied to insurances 
amounting to $2,000,000 ; in 1898 they will apply to insurances of $3,000,000. 



THE PRUDENTIAL INS. CO. OF AMERICA, l897-'98. 249 

In 1897 the Additional Benefits applied to insurances amounting to $130,- 
000,000 ; in 1898 these insurances will amount to $150,000,000. In addition, 
the rate of the 1898 dividends is considerably higher than in 1897. So that 
the total amount of cash to be paid in 1898 will be almost double that of the 
preceding year. 

The year just past, both in Industrial and in Ordinary, has been one of 
which the agency force of The Prudential has every right to be more than 
proud. The character and stability of the great mass of the business placed on 
our books has been above criticism. The sterling worth and loyalty of our 
Field Force were never more in evidence than to-day. From these two sources, 
— the nature of the business in force and the high standing of the men who 
have written that business, — from the fact that The Prudential policy, 
whether Industrial or Ordinary, is the best policy for the people, and from 
the great impetus gained during 1897 in both branches of the business, we 
fully expect that from every desirable standpoint the year 1898 will be the 
greatest, proudest year of our Company's life. 

These extracts will make clear the Company's position and 
explain the far-reaching consequences involved in so distinct a 
step in advance as the granting of dividends and cash-surrender 
values to the holders of Industrial policies. And it may here 
be added that, though only two years have passed since The 
Prudential first commenced to place Industrial policy-holders on 
practically the same basis as Ordinary policy-holders, the Com- 
pany's experience has made it clear that it will be possible and 
expedient to continue in the future the same course of prudent 
liberality as has been the Company's practice in the past. How- 
ever satisfactory the results accomplished had been, it became 
more evident than ever that the Company's work had but just 
commenced, and that, in other words, vast opportunities were 
being neglected for the more rapid extension of The Prudential's 
business operations. While a very considerable number of 
persons had been insured, the efforts thus far put forward to 
reach all sections of the community had been less systematic and 
thorough than was necessary to produce the best results. Ac- 
cordingly, in the early part of the year it was determined to 
inaugurate new methods of placing the objects and aims of 
Industrial insurance before the public, and by direction of the 
Vice-President ' ' a straight canvassing campaign ' ' was com- 
menced, which has been productive of excellent results. To 
explain the meaning of this term it must be understood that in 
straight canvassing agents are required to visit every house, and 
every floor, and to solicit directly every adult member of the 



250 HISTORY OF THE PRUDENTIAL. 

family, whether rich or poor, holding out inducements to insure 
on the Industrial, the Intermediate or the Ordinary plan of life 
insurance. I can not do better than quote from the Vice- 
President's letter of February 28, 1898, as follows : — 

Your attention is called to a matter of paramount importance to Pruden- 
tial interests. We refer to the urgent need of more Straight Canvassing. 

Although the debits are well taken care of, and a proper amount of busi- 
ness written on them, the great mass of the population are not approached 
on the subject of Life Insurance by our Agents. Thousands and tens of 
thousands of people in the different cities are never asked to take out 
Prudential policies, although they are in need of the protection our plans 
afford. 

The very foundations of the Company were laid by Straight Canvassing, 
and wherever it extends operations it depends on systematic house-to-house 
solicitation to acquire membership in the new territory. 

The Prudential must look to its Agency force for business ; one of the 
Principal duties of the Agent is to canvass. An Agent who is a mere 
collector falls short of our requirements. We want those who collect 
promptly and canvass thoroughly, employing their time to the best advan- 
tage in forwarding our interests. 

We shall insist upon more Straight Canvassing than has been done of 
late, for we know it will be productive of much good to all concerned. 

The burden of responsibility will not all rest with the Agent. We shall 
expect Superintendents and Assistants to do their part ; the former to advise 
and plan, counselling and encouraging his subordinates, while the latter 
should give practical help to their Agents in the Field by assisting them in 
the work of canvassing. The Collections should be finished as soon as pos- 
sible, so that everybody may go to the Field and display that activity which 
will assure satisfactory returns. 

The Prudential Field Force are in splendid position for canvassing. They 
represent a sound Company, offering the best forms of policies, Industrial 
and Ordinary. 

Our men are backed up by liberal advertising. The name of The Pruden- 
tial is known through the length and breadth of this land, and if business 
be asked for it can be obtained. Straight Canvassing will prove very profit- 
able if our representatives but measure up to their opportunities. In old or 
new Districts the chances for business are good. No Field has been so well 
worked that more can not be secured. 

We trust to see a hearty and lasting response to this call for action ; that 
our representatives will awake to the possibilities of the occasion and be on 
the alert to grasp all the opportunity afforded to extend the circle of Pruden- 
tial policy-holders. 

To illustrate the thoroughness with which this work of 
straight canvassing was carried on, I reproduce below the report 
required of the superintendent on the results accomplished by 



THE PRUDENTIAL INS. CO. OF AMERICA, 1897-98. 251 

both agents and assistants in addition to their regular duties of 
collecting the weekly premiums from the insured : — 

LBSUE D. Ward, Esq., Vice-President. 

Dear Sir : — I would report that Industrial applications, rep- 
resenting an aggregate in weekly premiums of $. , and 

Ordinary applications, representing $. of insurance, were secured 

in my District on straight canvass during the week commencing. 

The Assistant most successful in Industrial was Mr , 

in whose District applications, aggregating in weekly premiums 

, were written. 

The Assistant most successful in Ordinary was Mr , 

in whose District applications, representing $ of 

insurance, were written. 

The Agent most successful in Industrial was Mr , 

under Assistant ., who secured Industrial appli- 
cations with weekly premiums aggregating $ 

The Agent most successful in Ordinary was Mr , 

under Assistant , who secured applications, 

representing $ of insurance. 

In a supplementary letter, the Vice-President pointed out 
that ' ' By the use of this report we will be able to keep in touch 
with the operations in your superintendency in straight canvass- 
ing, and this information will not only be of value to ourselves, 
but of advantage to those who show a disposition to meet our 
desires in this matter. ' ' 

Coincident with the attempt to extend the business operations 
of the Company by means of a more thorough canvass of the 
territory in which the Company's offices were located, a decided 
effort was made this year, and continued thereafter, to reduce 
to the lowest possible minimum the lapse-rate on old and new 
business. While it can not be too often pointed out that the 
larger portion of Industrial lapses is of policies on which practi- 
cally nothing has been paid, nevertheless more stringent rules 
were applied to the conduct of the business in this respect, and 
material results followed a practice which could not be developed 
to its present degree until sufficient experience had been gained. 
As has previously been pointed out, the lapse-rate of the Indus- 
trial business affects much more seriously the welfare of the 
companies than the welfare of the insured, as the majority of 



252 HISTORY OF THE PRUDENTIAL. 

lapses represent a distinct loss to the former. Therefore, by 
insisting upon the watch-word that ' ' The business that stays is 
the business that pays," agents were induced to devote more 
time and attention to the writing of business which from the 
outset gave every indication of being a permanent addition to the 
Company's insurance in force. However successful The Pruden- 
tial has been in this respect, it will nevertheless be at all times 
a most difficult and serious problem to avoid a large number of 
lapses in the active efforts to materially increase or extend the 
business. Lapses very largely represent bookkeepers' statements 
made for actuarial purposes, and are really no financial loss to 
the insured, who, for a time at least, have enjoyed a certain 
amount of insurance protection. All lapses during the early 
policy years represent a loss to the Company, are detrimental to 
the business in general, and constitute a problem to the solution 
of which the Company's best efforts and thoughts have been 
devoted from the day the first application for Industrial insurance 
was received, on November 10, 1875. 

Some of the points previously touched upon in Mr. Dry den's 
letter of January 1st were reiterated in his address at the Com- 
pany's banquet at the Waldorf-Astoria on February 10, 1898. I 
make a few extracts from this address, which forms one of the 
most interesting contributions made to the literature of the 
Company's history during recent years : — 

In this period of two years the Company has perfected and introduced 
to the American public an Industrial policy which stands in the very fore- 
ground as the most equitable, the fairest and the best policy for the masses 
of this Republic. Whether the comparison be limited to companies of this 
American continent, or to those great companies which we respect across 
the sea, it stands far in advance. 

For the first time the holder of an Industrial policy under The Pru- 
dential's system and practice stands practically on an equality with the holder 
of the Ordinary policy. 

We have recently done another thing, the results of which rest with 
you and not with us. We have determined to put every Industrial worker 
upon his honor and forego the requirement for a bond. We say to him in 
effect that we believe him to be a gentleman and an honest man, and shall 
treat him as such until he proves himself unworthy of it. 

We stand here to-night, gentlemen, with a record behind us of twenty- 
two years. That is the span of this Company's life. The figures of most of 
the companies of the country are not as yet obtainable for this year. Of 
the sixty companies mentioned in the "Spectator Pocket Index" of last 



THE PRUDENTIAL INS. CO. OF AMERICA, l897~'98. 253 

year, fifteen were of the same age or younger than The Prudential. Of 
those fifteen but one or two had as large an income for the entire year as 
The Prudential had in two weeks. 

Now I think, gentlemen, that there are some fundamental reasons why 
this fact is as it is. In the first place we introduced a system of business 
here twenty-two years ago, new to our people, but which met an existing 
need. We have tried sincerely and conscientiously to adapt that system to 
the condition of our peopl e. We have endeavored to establish underneath 
all, at the very base of the Company, the underlying principle of equity 
and right, and have tried to inculcate among our friends and workers the 
belief that no matter who the party may be, however humble his position, 
whether policy-holder or servant, he shall have fair, liberal and honest 
treatment. And upon that line our business must continue. 

Those who have carefully followed the writer in his survey 
of the early and present-day conditions, as relating to the 
growth and development of The Prudential, will agree that the 
words of Mr. Dryden are fully justified by the facts. I feel 
satisfied that this conviction rests equally strong with the millions 
of policy-holders of the Company, who are to-day, as they have 
been in the past, the most faithful believers in the destiny of 
The Prudential. 

On February 15, 1898, occurred an event which has since 
become history, and to which, no doubt, must be largely attrib- 
uted the war of the United States with the kingdom of Spain. 
In the explosion of the U. S. Battleship Maine, this country lost 
the lives of 253 men whose memory is consecrated to a noble 
cause. Among the country's heroes few, if any, will ever be 
held in higher esteem and more affectionate regard. Of those 
who perished in the disaster, seventeen sailors and marines were 
insured with The Prudential, holding twenty-one Industrial poli- 
cies for an aggregate sum of $3,529. It has seemed to me fitting 
to incorporate into this work the names of those who proved them- 
selves their country's heroes in peace as well as in war. Those 
who hold and believe that peace has its victories as well as war, 
and who accept the modern dictum of social morality, that those 
who provide for themselves and their dependents through the 
medium of life insurance are deserving of the highest praise, will 
readily concede that the names of those here permanently placed 
on record are deserving of greater honor than those who 
thoughtlessly shirk one of life's imperative duties by making 
no provision for life's contingencies on a plan and by a method 



254 HISTORY OF THE PRUDENTIAL. 

fully within the reach of every one, no matter how humble or 
how poor* : — 

Names of Policy-Holders of The Prudential whose Lives were 
Lost in the Explosion of the U. S. S. " Maine," February 15, 1898.1 

1. C. Hauck, ....... Landsman, Brooklyn. 

2. W. Hamberger, Landsman, Jersey City. 

3. E. P. Graham, Coal-passer, Jersey City. 

4. R. Wilson, Chief Quartermaster, .... Brooklyn. 

5. H. J. Gross, ...... Landsman, New York. 

6. T.J.Jones, 2 Coal-passer, Brooklyn. 

7. J. H. Dierking, Drummer, Brooklyn. 

8. T. M. Cole, Bayman, Philadelphia. 

9. M. F. Harris, Quartermaster, New York. 

10. T. Clark, Coal-heaver, Newark. 

11. F. L. Jernee, Coal-passer, Newark. 

12. F. F. Butler, Machinist, Harrison. 

J 3- T. J- Quigley, Plumber, New York. 

14. A. J. Holland, Quartermaster, Brooklyn. 

15. H. Auchenbach, .... Fireman, Sheridan, Pa. 

16. F. C. Holzner, Seaman, New York. 

1 7' J- J. Shea, 2 Coal-passer, New York. 

1 Had three policies. a Had two policies. 

While it was not until April 21st that a state of war was 
declared to exist between the United States and Spain, as early 
as April 9th Mr. Dryden addressed a circular letter to the field 
force with reference to permission to the Company's policy- 
holders in the army or navy of the United States or the militia 
to serve in time of war. I quote from the letter the following 
extracts, to indicate the Company's practice in dealing with war 
risks in both departments of the business : — 

In consequence of the present unsettled state of National affairs, a 
number of inquiries have been made as to the course The Prudential would 
take with regard to those policy-holders who may serve in the Army or 
Navy of the United States or the Militia in time of war. 

The question is a serious one, in view of the large number of policy- 
holders of The Prudential who might be affected by an outbreak of war. 
After careful consideration, we have decided as follows : — 

As to all policies, whether Industrial, Intermediate, or Ordinary, which 
may be in force at the time of declaration of war, permission is hereby given 

* The only American sailor killed in the naval battle of Santiago on 
July 3, 1898, George Ellis, Chief Yeoman of the Cruiser Brooklyn, was 
insured in The Prudential under an Industrial policy. 

f Appendix to the Report of the Chief of the Bureau of Navigation, 
p. 11 et seq. Wash., 1898. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1897-98. 255 

for the insured under such policies to serve in the Army or Navy of the 
United States, or Militia of any State of the United States, in time of war, 
and no written permission for such service need be obtained from the 
Company, nor will any extra premium be charged. It will not be necessary 
to send in any policy for endorsement. 

It will be observed, on examination, that permission was 
granted by President Dryden to the then Prudential policy-holders 
to serve in the army or navy of the United States, or the militia, 
without the charge of an extra rate, and to facilitate matters no 
written permission for such service was required. These rules and 
regulations were supplemented by a circular, dated November 17, 
1898, with reference to prospective policy-holders in the Ordinary 
department, but want of space forbids an extended discussion 
here of an interesting phase of life-insurance history. 

As a further matter of permanent interest, I give below a 
table showing the Company's Industrial war mortality experi- 
ence, from February 15, 1898, to December 31, 1899, and includ- 
ing the loss of life caused by the explosion of the Maine : — 

WAR MORTALITY EXPERIENCE, 1898 AND 1899. 
Industrial Department. 



Lives lost by the explosion of the Maine, 

Deaths from battle and disease — 

In the United States, in hospitals and army camps, 

On Transports, 

In Cuba, 

In Puerto Rico, 

In Hawaii, 

In the Philippine Islands, 

Total deaths, 



No. OF 
Policies. 



238 



Amt. of 
Insurance. 



21 


$3,529 00 


148 


22,411 00 


4 


762 00 


25 


3,124 00 


15 


2,156 00 


6 


637 00 


19 


2,889 °° 



$35>5o8 00 



Another aspect of the disturbed state of national affairs 
resulting from the war with Spain, and directly affecting the 
interests of Industrial policy-holders, was the passage of the War 
Revenue Tax Act on July 1, 1898, providing that policies issued 
on the Industrial weekly-payment plan should pay a Revenue 
Tax of 40 per cent, of the first weekly premium, being equal, in 



256 HISTORY OF THE PRUDENTIAL. 

other words, to a tax of four cents on every ten-cent policy issued 
by the Company, irrespective of the fact whether the policy was 
actually placed or not. Ordinary life policies were taxed eight 
cents for each $100 or fraction thereof of the amount of insur- 
ance. With reference to the Revenue Tax on Industrial policies 
the subsequent practice of the Company was outlined in a letter of 
the President, dated July 2, 1898, stating that the Company 
would bear the entire expense of the war tax on the Industrial 
business. With reference to Ordinary policies, a letter, under 
date of June 28th, informed the members of the field force that 
the revenue stamps would have to be paid for by the prospective 
policy-holders, but, under date of October 5th, this was modified 
in the manner that on and after that date, until otherwise 
directed, the Company would also pay for the revenue tax on 
Ordinary policies.* 



*A tax on insurance, according to Mill ("Principles of Political 
Economy," Book V., Chap. VII.), " is a direct discouragement of prudence 
and forethought," and few have tried to defend it as a means of raising 
revenue, except on the ground of political expediency. One of the ear- 
liest writers on the subject well expressed the views held by economists 
and life insurance managers that "A tax on insurance is a tax not only 
upon industry, but upon prudence and frugality, and the American system 
seems to be far worse than that of which we have been so long complaining 
in Great Britain in respect of Fire Insurance, and which, by such com- 
plaints, we have recently compelled our Government to a large extent to 
forego." (Sir S. Morton Peto in "Resources of America," p. 377. Lon- 
don, 1866.) An equally emphatic statement to the same effect is to be 
found in the Insurance Times of 1868 (p. 169) on the Internal Revenue 
Acts of 1862 and 1864 : " This is probably necessary for the present, although 
all taxes on prudence are open to serious objection on principle and ought 
to be dropped as soon as possible. * * * * A man may save from his 
income and be the better and richer for it, but what statesman would wish 
to compel citizens to economize in insurance?" Charles Sumner, also, 
according to the Insurance Monitor of April, 1884, " who had examined the 
subject in his usual thorough and conscientious manner," well said that 
" the proposition to tax life insurance was an attempt to impose a tax upon a 
tax," but this view, unfortunately, has found favor with but few legislators, 
who are, generally speaking, either ignorant of, or indifferent to, the fact 
that taxes on life insurance are, as a matter of course, paid by the policy- 
holders. As a pertinent illustration I may add the statement that in 1899 
The Prudential paid $448,855 in taxes and license fees, all of which would 
otherwise have been returned to the policy-holders in the form of increased 
dividends, larger additional benefits, or increased cash-surrender values. 



THE PRUDENTIAL INS. CO. OF AMERICA, l897~'98. 257 

A very material improvement was made in the payment of 
Industrial claims, of which earlier mention would have been 
made but for the continuity of events connected with the war 
measures adopted by the Company for the conduct of the business. 
Under date of April 4th, the Vice-President of the Company 
communicated to the field force new instructions with reference 
to the payment of Industrial claims, which I can not do better 
than quote in an abbreviated form : — 

INDUSTRIAL CLAIM PAYMENTS. 

The Prudential was the first Company in this country to pay death 
claims immediately upon receipt of proofs of death at the Home Office. We 
have now decided, in keeping with the Company's settled policy of doing 
the most good in the most practical way, to take a step still further in 
advance. Even the slight delay of sending the claim papers to the Home 
Office and the time necessary for the check in payment to reach the Field 
means a great deal to the bereaved family in a time of distress. 

To overcome this delay we are going to entrust you with the payment 
of all claims not exceeding $130 on Regular White Industrial policies imme- 
diately on completion of the usual proofs of death, and before forwarding 
the papers to this office. For the present, claims on colored lives, Endow- 
ment policies and all claims amounting to more than $130 are to be for- 
warded in the usual way, and, after examination at this office, if they are to 
be paid without further correspondence, we will telegraph you what amount 
to pay. All doubtful claims must be referred to the Home Office. 

We feel confident that you will appreciate the responsibility of this 
change and exercise the same care that you would if every dollar you paid 
out belonged to yourself. 

The same forms will be used as heretofore, and must be completed be- 
fore payment is made. The policy must be produced in every case ; if a 
duplicate is submitted, no payment shall be made until you have satisfied 
yourself that the original is not in existence. Cases where no policy is pre- 
sented must be referred to this office. 

Careful investigation must be made as to the insurable interest of 
claimant in accordance with R^ule 4 for the adjustment of claims, and doubt- 
ful cases must be referred to the Home Office. 

All claims on policies bearing an endorsement other than for additional 
insurance, revival lien or change of age, should be sent to the Home Office 
for adjustment. 

Insurance in Other Companies. — In case of Infantile policies where 
there are other insurances in other companies and the total amount of pre- 
mium exceeds ten cents, they should be referred to the Home Office. 

After investigation of a claim, if you are perfectly satisfied that it is a 
valid one, you may draw a check to the order of the claimant on the form 
herewith sent you, against our deposit in the bank. The check must be en- 
dorsed by the claimant and presented for payment in the usual way. The 



258 HISTORY OF THK PRUDENTIAL. 

proofs of death should contain amount paid, date of payment, check number, 
and, with claimant's receipt attached, be immediately forwarded to this 
office. 



In addition to explicit instructions governing the immediate 
payment of Industrial claims to the local representatives of the 
Company, a telegraphic code was adopted for use in the payment 
of claims by telegraph, and it will thus be apparent that the 
Company adopted every possible means of improving its relation 
with policy-holders in this direction. Under date of November 
4, 1898, after the system of immediate claim payments for certain 
amounts had had a sufficient trial, it was decided to make the 
limitation for such payments $200, instead of $130, which had 
previously been the limit. The method adopted met with uni- 
versal approval among the Company's beneficiaries, and expe- 
rience, now extending over a sufficient period of time, has made 
it clear that the step taken was a wise one, and, thus far, there 
has not been a single instance in which the Company's liberal 
practice has been abused. 

Among other improvements made in the administration of 
the Company's business was a change in dealing with lapses on 
Industrial policies in cases where Ordinary insurance had been 
secured by the same agent to take the place of the Industrial. 
It must be understood that agents are held responsible for lapses 
to the extent that they are required in all cases to make a net 
increase in their business in force, and they have therefore to 
replace, without compensation, by new policy-holders, old policy- 
holders who, for one reason or another, may have lapsed their 
policies. This practice is warranted by the inseparable condition 
of the Industrial field administration, that only by holding the 
agent personally responsible can unnecessary lapses be avoided, 
and there is in this practice absolute proof that the Company 
is sincere in its assertion that at all times everything possible 
has been done to avoid lapses and retain policies on the books of 
the Company. However, with the development of Industrial- 
Ordinary insurance, — that is, the extension of insurance prin- 
ciples to the more prosperous elements of the population, — 
frequent instances came to the notice of the Company where 
Industrial policies were surrendered for Ordinary policies taken 
out in their place. To facilitate this form of transfer and place 



THE PRUDENTIAL INS. CO. OF AMERICA, l897-'98. 259 

no hindrance in the way of a material improvement in his insur- 
ance contract on the part of the Industrial policy-holder, the 
Company, under date of March 16th, over the signature of the 
Vice-President, informed the field force as follows : — 

INDUSTRIAL-ORDINARY LAPSE. 

We have been solicited, on several occasions, to release an Agent from 
the lapse of an Industrial policy in cases where Ordinary insurance has 
been secured by the same Agent to take the place of the Industrial. 

Generally speaking, an Industrial policy-holder, who decides to take 
out Ordinary insurance with us, concludes, also, to retain the Industrial 
policy in force, looking upon the amount insured thereunder as a burial 
fund, the new policy being regarded in the light of an estate. This is a view 
of the matter to be encouraged, for it seems to be the right one. 

It may occasionally happen, however, that the lapse of an Industrial 
policy is involved in the issue of the Ordinary. While we can not see our 
way clear to releasing the Agent from the Industrial lapse where the insured 
takes out Ordinary insurance on the quarterly or semi-annual premium 
plan, we shall be willing to grant a release from the lapse of the Industrial 
policy, provided the insured takes out the Ordinary insurance under the 
annual premium plan. 

You may instruct your Agents to this effect, urging upon them, how- 
ever, the advisability of trying to keep both forms of insurance in force. 

With reference to the last sentence it may be explained 
that the principal object of an Industrial policy being strictly 
to meet burial expenses, it has been found by experience that 
in many cases, where Ordinary insurance is subsequently 
taken out by original Industrial policy-holders, the Indus- 
trial policy is kept in force as a burial provision, leaving the 
full amount of the Ordinary policy for surviving members of the 
family. 

A change was made this year in the issue of Industrial poli- 
cies which was also a decided and important step forward, and 
one which marks a still further advance over the methods employed 
by other companies. It had heretofore been the practice to date 
new Industrial policies on the Monday of the week following that 
in which they were sent out. This practice was changed under 
date of March 28th, and the field force was informed by a cir- 
cular letter from the President that — 

Commencing with the policies sent to the Agent to be included in his 
debit for April nth [1898], we shall make the date the Monday of the week 



26o HISTORY OF THE PRUDENTIAL. 

the applications were approved at this office. Thus in return for applications 
obtained during the canvass of the week of March 28th, if they reach the 
Home Office on April 4th, and are there approved, we shall issue the policies 
bearing date of April 4th, instead of April nth, as under the present plan. 
The advantages of this method will be apparent at once. The Agent in 
canvassing can promise insurance at an earlier date than now. He can 
place his business without the delay which at present occurs, and follow 
the same up and keep in closer touch with the applicants, collecting from 
them each week — as the premiums, if the policies are not granted, will be 
returned, while if issued they are in benefit at the earliest practical oppor- 
tunity. 



In consequence of this concession new policy-holders were 
placed in immediate benefit for at least a portion of the face 
value of the policy practically from the date application 
was made. Only those familiar with the actual operations of 
an Industrial agency can fully realize the importance of this 
step taken by The Prudential in advance of other Industrial 
companies. 

An apparently slight, but actually very important, change 
was made this year with reference to charges for premium receipt- 
books. It had heretofore been the practice to charge policy- 
holders for the premium receipt-book which accompanies the 
policy, and in which the weekly premiums are entered by the 
agent, but under date of August 12th the field force was 
informed that thereafter no charge would be made for premium 
receipt-books, but that the Company would expect agents to use 
the same care in ordering and disposing of these books as under 
the system formerly in force. When it is considered that the 
Company annually makes use of a vast number of such books, 
the individual payment, however small, assumes considerable 
proportions in the aggregate, representing a not inconsiderable 
loss to the Company, which once more was assumed for the gen- 
eral welfare of the business and the best interests of the policy- 
holders. 

With reference to the payment of Industrial Cash Dividends, 
it had been the practice of the Company to have the policy-holders 
call at the office of the Superintendent and collect personally the 
amounts due as dividends under such policies. To facilitate 
matters it was decided, under date of August 4, 1898, to have 
these dividends paid at the houses of the insured by the Assistant 



THE PRUDENTIAL INS. CO. OE AMERICA, 1897-98. 261 

Superintendent, and the views of the Company were outlined in 
the following letter of the Vice-President : — 

INDUSTRIAL CASH DIVIDENDS. 

It is our desire to pay these dividends as promptly as possible and with- 
out causing any inconvenience to the policy-holders. If this be done, we 
shall insure the greatest good to The Prudential and its representatives that 
can come through the liberal action of the Company. 

As a means to this end, you are authorized to have these dividends 
adjusted by the Assistant Superintendents calling at the home of the parties 
to whom dividends are payable, and there making the proper settlement. 
Whenever it is practicable so to do, you should try to save the policy-holders, 
and others interested, the necessity of visiting your offices. If the parties 
wish to have the payment in cash, in preference to other method of settle- 
ment, no undue pressure should be brought to bear upon them to change 
their minds. Let the adjustment be made in the manner most satisfactory 
to the members. 

We think, if proper care be exercised to see that our instructions as to 
the method of adjusting dividends be carried out, the work can be safely 
entrusted to the Assistant Superintendents. 

If you should find it expedient so to do, you may occasionally use the 
services of your reliable Agents, so as to relieve the Assistant Superintend- 
ents when their other duties are pressing. 

We shall, of course, expect you to look closely after the matter, so as 
to fully protect us. 

This step is one fully in harmony with the theory of Indus- 
trial collections, in that experience has made it clear that working 
people are not in a position to leave their homes or workshops for 
the purpose of paying premiums or even for the occasional collec- 
tion of dividends, and, to overcome possible objections to the 
Company's early rule to have Cash Dividends paid at the office 
of the Superintendent, the same was modified to meet the wishes 
of the public for the payment of dividends at the homes of the 
insured.* 



* The collector in Industrial insurance is a necessity, it being one of the 
essential principles of the business that the weekly premiums must be col- 
lected from the house of the insured. Many as have been the efforts to 
eliminate the collector, by holding out inducements to the insured to pay at 
the office, by offers of a reduction of the premium, all such attempts have 
proven a complete failure. It has been brought out time and again in par- 
liamentary investigations that without the collector the entire system of 
trading friendly societies would fall to the ground, and that one of the pri- 
mary causes of the failure of Government insurance in England is to be 



262 HISTORY OF THE PRUDENTIAL. 

Among the Company's business achievements during 1898 
mention must be made of one of the largest transactions ever 
consummated in Partnership I^ife Insurance in the United States. 
A policy was issued during the month of October for $400,000 
for Partnership insurance on the four members of the firm of 
Hahne & Co. of the city of Newark. The annual premium on 
this policy was $13,221, the check for which was dated October 
20, 1898. The firm of Hahne & Co. owns the largest depart- 
ment store in the State of New Jersey, having, much like The 
Prudential, developed from small beginnings into a structure of 
vast proportions. Before deciding in what company the firm 
would seek the insurance protection referred to, the leading life 
companies of the country submitted their propositions. No pol- 
icy, however, so completely satisfied the members of this firm as 
the contract of The Prudential. It is something very considera- 
bly to the credit of The Prudential Insurance Company that, 
in open competition with all of the long-established old-line 
companies, it should have been possible for an institution, 
developed largely for the purpose of extending the principles of 
insurance to the industrial population, to consummate this year 
a transaction which ranks as one of the largest and most impor- 
tant in American life-insurance history. 

Aside from the increasing public appreciation of Industrial 
and Ordinary insurance as offered to the public by The 

found in the fact that the Post-office does not employ collectors to call for 
the weekly premiums at the homes of the insured. The fact must not be 
overlooked that many of the Industrial policy-holders hold policies for a 
weekly premium of but five, ten or fifteen cents. Living, as these people 
do, sometimes miles from other habitations, it naturally becomes a seri- 
ous question how to protect properly the individual interests of every 
policy-holder. Experience has shown that it is only by means of the 
" debit " system of the Industrial companies and the payment of a reason- 
able commission that this function can be properly discharged. While in 
Ordinary insurance the renewal commissions on payments made at the 
office of the agent are often as high as 7^ per cent., in Industrial insur- 
ance the agent receives 15 per cent, for calling fifty- two times a year for the 
premiums at the homes of the insured, irrespective of the distance the 
policy-holder may live from the office. If to this amount of necessary 
labor is added an additional amount of effort required to call more than once 
when the insured may not be at home or not be in a position to pay the 
premium, it will readily be conceded that the commission paid for the col- 
lection of the weekly premiums is not an unreasonable one. 



THE PRUDENTIAL INS. CO. OF AMERICA, l8o7-'98. 263 

• 

Prudential, official opinion was now more than ever strongly and 
emphatically in favor of life insurance for the masses on the 
Industrial plan of The Prudential Insurance Company. limiting 
myself to a single extract from official literature, I quote as 
follows from the 26th annual report of Mr. John C. I^inehan, 
Insurance Commissioner of New Hampshire : — 

The industrial branch of life insurance has been put through a severe 
test during the past year, especially the feature devoted to the insurance of 
children. Some three years ago an attack was made upon it by a local paper, 
and the statements made at the time were of such a character that an in- 
vestigation was deemed necessary. The opinions of gentlemen who were 
not interested in the business, but whose professions gave them opportunities 
to study its effect, were sought for, and in every instance their reply was 
that it was a great blessing, for in many instances it was the only kind of 
protection working people could afford to carry. 

Industrial insurance furnishes one of the greatest benefits that can be 
received in return for the amount paid, for very often, in case of death, the 
insurance is all there is left, either to bury the dead or provide for the 
living. 

A careful consideration of the subject, as well as of the figures given, 
and the circumstances from which industrial insurance originated, must 
convince all fair-minded men that the business is not only legitimate and 
honorable, but just as essential to those among whom it is operated as the 
other kind is among those more favored with the good things of this world. 

To this recognition of Industrial insurance from the stand- 
point of public policy, I may properly add the following tribute to 
the good work of life-insurance agents in general by the late 
Rev. Phillips Brooks : — 

One of the greatest blessings of the vocation of Insurance agents is 
that they eliminate a great deal of the worry of life ; they rid men of a 
great many of those distressing and carking troubles that keep them from 
living their true lives. * * * * I fancy there is no profession that 
profits so much by the great work that life-insurance agents are constantly 
doing as the profession of the ministry. By it they are set free to do what 
they are commissioned to do, careless how long life is going to last, sure 
that Godwill care for those they love, because in His Providence He has 
led men to organize this great interest of life insurance for their protection. 

What Bishop Brooks said of life-insurance agents in general 
applies with special force to the daily labor of the vast army of 
Industrial agents, carrying into the homes of the industrial mil- 
lions the teachings of a quarter of a century of insurance efforts 



264 HISTORY OF THE PRUDENTIAL. 

and results, and completely fulfilling Mr. Dry den's early ambi- 
tion, to make a success of Industrial insurance in America along 
the same lines which made possible the gigantic success of Sir 
Henry Harben's scheme in his half -century management of The 
Prudential Assurance Company of London. 

I have purposely refrained in this work from making more 
than incidental mention of the large number of letters of thanks 
and appreciation which constantly reach the Company from bene- 
ficiaries under Industrial policies, but I here include a short letter 
which is so full of pathos and indicates so clearly the beneficent 
mission of Industrial insurance, that I reproduce the same in full 
as quoted in The Prudential Weekly Record of October 17, 1898 : — 

Philadelphia, Pa., September 27, 1898. 
To John F. Dryden, Esq. 

Dear Sir: — I would state that I have received the money on policy 
662,025, being $187.95. I was very much pleased at your promptness in 
settling up my claim, as I was in need of money to bury my wife, and 
without that assistance the county would have had to bury her, as I have 
been out of employment for months, and I can assure you, Mr. President, 
that I highly appreciate your kindness and consider your institution as the 
real " Savings Bank" of the poor people, and whenever or wherever I 
can say a good word for it I will do so with pleasure. 

I remain, 

Yours very respectfully, 

2012 South Gratz Street, ROBERT MACCLERMONT. 

36th Ward, Philadelphia. 

The results of the year 1898 had been exceedingly satis- 
factory. In the Industrial department the number of policies 
had increased to 2,924,526, for an aggregate amount of Indus- 
trial insurance protection of $333,992,200. In the Ordinary 
department, under the new system of making each representa- 
tive of the Industrial also a representative of the Ordinary 
department, the business had been increased to 71,927 policies 
for an aggregate amount of $80,554,853 of insurance protec- 
tion. Corresponding increase had been made in the assets and 
surplus of the Company, while the total annual payments to 
policy-holders during the year reached the colossal sum of 
$5,389,403. The actual premium income of the Company from 
both the Industrial and Ordinary business exceeded $16,000,000, 
while the total income, including interest, etc., was $17,481,876. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1897-98. 265 

The results of the year's business operations had therefore been 
very gratifying and had proven a most emphatic public endorse- 
ment of the Company's conservative policy of a prudent liberality 
in dealing with its policy-holders in its own way according to the 
light of its own experience. 

In his annual letter to the field force for the year 1899, Mr. 
Dryden, under date of January i, 1899, commented upon the 
excellent record made during the preceding year, and, in words 
which are deserving of being reproduced, once more empha- 
sized the importance of reducing the lapse-rate : ' ' The Company 
desires and is striving to keep the lapses down to the minimum, 
and everything within the rules of the Company must be done 
to keep the membership intact. When it is finally decided that 
premiums can not be collected, see that Paid-up Policies (if the 
insured are entitled thereto) are applied for." Thus the Com- 
pany's interest in its policy-holders is made manifest by its 
rules, under which agents are not only required to put forward 
every effort to keep policies in force, but in cases where the 
lapse of the policy is inevitable special efforts must be made to 
protect the interests of the insured, and it may be said, with 
all the emphasis which it is possible to put into words, that not 
a single policy has ever lapsed which, as far as it was within 
the power of the Company, would not be on its books to-day, 
had advantage been taken of the exceptional opportunities given 
for revival or reinstatement. With special reference to paid-up 
policies, the President stated in his letter that — "The number 
of Paid-up Policies in force upon our books is now 82,984, 
covering insurance for $3,690,205. The number issued during 
1898 was 33,619, representing insurance for $1,670,360." In 
commenting upon the exceptional record made in the Ordi- 
nary department, in which there had been a net increase of 
$21,000,000 in the insurance in force, the President paid the 
following graceful tribute to the field force : ' ' These facts and 
figures tell of the steady and permanent devotion and loyalty to the 
Company s interests, on the part of the field staff, that we have long 
maintained can not be paralleled by any other company. ' ' 



266 HISTORY OF THE PRUDENTIAI*. 



CHAPTER XV. 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, 1899. 

By January 1, 1899, The Prudential had achieved results 
which are practically without a parallel in the history of American 
life insurance. The experiment commenced in 1875 had been 
developed into a success of gigantic proportions. Where once 
there had been a question of doubt, where once the voice of 
pessimism had been ready to decry this early effort to extend the 
principles of genuine life insurance to the masses, every compe- 
tent critic and financial authority now readily conceded to the 
founders of Industrial insurance the foremost position in the life 
insurance world. Among others the Insurance Monitor, in a brief 
reference to the results achieved by The Prudential during 1898, 
related the following instance of well-deserved approval : ' ' We 
heard some high praise of the Prudential officers the other day, 
from one of the leading lights in life insurance. The officers of 
The Prudential have long realized that Industrial insurance must 
be conducted in the interest of the masses, and any action which 
would seem to them likely to be construed otherwise would be 
pretty sure to meet with their disfavor. It was the personal 
appeals and arguments of President Dryden to the industrial 
classes, for their own interest, that laid the foundations of the 
business in this country. He is studying that interest to-day. ' ' 
To these remarks I add an extract from the Camden Daily 
Telegram of January 27, 1899 : — 

The twenty-third annual statement of the Company, issued the first of 
this year, gives to its policy-holders in a concise, business way, a clear 
insight into its present and remarkable continued healthy growth. The in- 
vestments are wisely and prudently made by experienced, able and honest 
financiers, who give their undivided time and abilities to the interests of 
the Company, at the head of which stands the President, John F. Dryden. 
Though at the head of an efficient staff which renders him such valuable 
support, yet much of the unprecedented success of The Prudential is due 
to the hard work, rare financial qualifications and sagacity of its President, 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 2 &7 

who has perfected its organization until it is now like a completed machine, 
independent of the direction of a single head for its future smooth running. 
Such has been Mr. Dry den's great ambition, and, while he has lived to see 
its fruition, there is every prospect that he may enjoy it for many years 
to come. 

The people of New Jersey are justly proud of the fact that this great 
institution was founded in their State, though its business has so long since 
outgrown the confines of any specified locality or country. The home 
office in Newark legally designates it as a New Jersey corporation, while as 
a taxpayer it is one of the largest contributors to the State Treasury, and 
outside of railroads the largest, its assessment last year, promptly paid, 
being no less than $96,980.42. This sum does not include municipal taxes, 
which it pays direct to Newark. 

It is but proper that mention should be made here of a factor 
of not inconsiderable importance in making for the great success 
of The Prudential in the Ordinary department. Sometime during 
1896 The Prudential Company commenced the use of a striking 
advertisement in the nature of a reproduction of the Rock of 
Gibraltar, across the face of which, in bold letters, appeared 
the motto — "The Prudential has the strength of Gibraltar/' 
This advertisement is to-day considered the most striking one of 
its kind, and by this means the name of the Company has become 
more than ever a household word throughout the entire country. 
By a curious coincidence this advertisement proved the fulfill- 
ment of a singular prophecy already referred to in the earlier 
part of this work.* The Newark Morning Register of Novem- 
ber 13, 1875, concluded an editorial on the new aspirant for life- 
insurance honors in America with the statement that ' ' The 
Society may be said to be founded upon a rock. ' ' It was pointed 
out in The Prudential Weekly Record of July 31, 1899, that it 
was no longer the whole truth that the Company ' ' may be said 
to be founded upon a rock," " for there is now no may be about 
it. It is now an established fact, one that is not only unques- 
tioned, but absolutely unquestionable, that The Prudential is 
'founded upon a rock,' and stands to-day, in its way, equally 
a synonym and symbol of strength and impregnability with 
the renowned stronghold that, a little more than a century ago, 
successfully resisted a four years' siege." It will be granted, 
I believe, that seldom has an advertisement so completely 

* Ante, p. 58. 



268 HISTORY OF THE PRUDENTIAL. 

represented a business organization and its past history in so 
concise a phrase as ' " The Prudential has the strength of 
Gibraltar," for of few companies or business organizations can 
it be said, in the light of the history which is here given in as 
much detail as limited space will permit, that it was built on 
solid foundations, and with the fixed determination that on such 
foundations a structure should be reared which should stand 
antagonism, opposition, the most fierce competition, and the 
inevitable changes of time. While perhaps a quarter of a cent- 
ury is too short a period to demonstrate the permanency of such 
an institution as The Prudential, it must not be forgotten that, 
aside from its financial security and foundation on correct prin- 
ciples of finance and the law of mortality, the Company rests 
equally secure in the affection and regard of more than three and 
a half millions of loyal policy-holders, and almost 15,000 em- 
ployees whose steady and permanent devotion and loyalty to the 
Company's interests, in the words of Mr. Dryden, " cannot be 
paralleled by any other company." 

As an illustration of the continued increase in the popularity 
of the Company, mention must be made of a very important trans- 
action that occurred during the latter part of the month of De- 
cember, 1898, and to which extended reference was made in The 
Prudential Weekly Record of January 2, 1899. The firm of Mont- 
gomery Ward & Co., of Chicago, had effected an arrangement 
with the Company by which whole-life policies were written upon 
the lives of 150 of the married employees of the firm. The poli- 
cies were presented as a Christmas gift, one year's premium having 
been paid thereon in full. In referring to this transaction, The 
Prudential Weekly Record stated that ' ' The firm selected the 
regular policies issued by The Prudential as the best they could 
find in the market for the purpose desired. In a letter of presen- 
tation accompanying each policy the firm said : 'As to the Com- 
pany and plan, we selected The Prudential because of its strong 
financial standing, coupled with the great liberality of its policy 
contract, with its incontestability, loan and surrender values, 
automatic non-forfeiture, etc' " The transaction naturally 
attracted considerable attention, and must be classed as one of 
the important events in life-insurance history. 

Influenced, no doubt, by the Montgomery Ward example, 
the Ithaca Daily News, during the latter part of the year, 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 269 

completed an arrangement with The Prudential for insuring its 
employees, including even the carrier-boys, under policies in the 
Industrial department of the Company, all the premiums being 
paid for a period of some months by the newspaper, thus offering a 
direct incentive to its employees to make an insurance provision 
against death and other contingencies, on the Industrial plan. 

A determined effort was made this year to increase the 
efficiency of the field force by improved methods of ' ' straight 
canvassing," and special straight canvassing agencies were 
established independent of the regular local offices, with an 
exceptional degree of success. In referring to the subject under 
date of March 13th, the Vice-President, in direct charge of the 
vast field operations, addressed the superintendents in a letter, 
from which I make a few abstracts : — 

In order that you may thoroughly understand what we mean by the 
term A Straight Canvassing Superintendent, Assistant or Agent, we would 
state that each should start absolutely without debit* and receive no 
transfers whatever. 

We propose to appoint Superintendents without debits in every locality 
where we think the conditions warrant it, providing suitable men are 
available. 

If a Superintendent feels that he cannot make a success of this feature 
of the business, we advise him not to undertake it ; but we have already 
demonstrated in a number of cases that Superintendents, Assistants and 
Agents can succeed under the conditions set forth. 

This letter was supplemented by another communication, 
dated March 31st, in which the question of agency compensation 
under the new arrangement was dealt with in detail. I quote 



* The term " debit " is applied to the total amount of weekly collect- 
ible premiums charged against an agent and for which the latter is respon- 
sible. A "debit" is determined by deducting from the premiums of the 
total number of policies issued or transferred to an agent the premiums of 
the policies terminated by reason of lapse, transfer or death. If, for ex- 
ample, $80.00 of weekly collectible premiums have been issued to the agent 
and $12.50 have been terminated for some reason or other, the agent's 
"debit " would be $67.50. This amount of premiums the agent is expected 
to collect and in return he is paid a commission of 15 per cent., which is 
termed "ordinary salary." In a general way it may be said that the 
average collection will reach from 98 to 99 per cent, of the weekly collect- 
ible debit, while the average debit is approximately fifty dollars. 



270 HISTORY OF THE PRUDENTIAL. 

from the letter of the Vice-President a few passages of more 
than passing interest and importance : — 

The magnificent support which has been given this movement through- 
out the Field, and the well-known ability of our Staff to produce new busi- 
ness of the highest grade, encourages us to believe that no interests will be 
jeopardized and no dangers met with if we extend to Superintendents with 
debits, as well as to those without, the privilege of making advances, when 
necessary, to new Agents during those first weeks of their service when no 
special salary can be regularly received. 

Advances are to be made only to new Agents, and only when in the 
judgment of the Superintendent they are necessary to secure the services 
of permanent and reliable men. 

A satisfactory amount of new business, known by the Superintendent 
to be of good quality, must be in hand before an advance is allowed. 

No advance is to be made after the time when special salary could have 
been received in the regular course. 

The Agent must, in every case, be made to understand that the advance 
is in the nature of a loan, to be repaid by him as soon as he makes regular 
earnings. 



It will be observed, on close examination of these extracts, 
that the Company's interests were well protected, while at the 
same time new agents, engaged at first in a rather difficult field, 
were encouraged by slight advances, sufficient to meet living 
expenses, until by their own efforts they had succeeded in estab- 
lishing a permanent and sufficient income. 

The careful attention given to every detail in the manage- 
ment of the field force of The Prudential is perhaps nowhere 
better set forth than in a letter from Vice-President Ward to a 
newly-appointed superintendent for his guidance in managing the 
affairs of his district. The letter was republished in The Pruden- 
tial Weekly Record of January 16, 1899, and the following extracts 
will illustrate the Company's interest in the economic and efficient 
administration of its district offices : — 

On assuming the management of a District for this Company you should 
realize that the responsibilities of your position are of considerable mag- 
nitude. 

The Prudential desires to be known well in every community as fair- 
dealing and liberal in its treatment of policy-holders and others connected 
with it. Let it be your constant aim to do right and to see that those under 
you act with the same purpose — all working to promote and advance the 
reputation of the Company and its employees. The opinion of the people 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 271 

who know The Prudential only by reputation will be influenced favorably 
or adversely according as the local office is managed. 

Your position as Superintendent entitles you, in a business way at least r 
to an acquaintance with the most influential residents, and you should 
deport yourself in a manner that will command the respect and confidence 
of the community at once and only employ those who will measure up to 
the same standard. 

Instruct your force never, under the penalty of immediate dismissal, to 
misrepresent a contract. Have the Company's rules strictly enforced. 
Examine the agents' collection books frequently, and see that policies are 
lapsed under the four weeks' rule. Retain every good or promising agent 
if possible — ' ' finals ' ' mean lapses. Insist on Straight Canvassing. Encour- 
age each man to write Ordinary and to make the attempt to get Annual 
Premiums. 

Select for Agents men who are thoroughly respectable and possessed 
of the qualities which make for success — honest, earnest, industrious and 
sober men. Get good material to work upon, and then spare no pains in 
the development. If you begin aright, the after- work is much easier. Do 
not let an Agent go for want of a little time and care. Remember it is a 
part of your duty to make Agents and Assistants successful. 

We shall personally watch your record with a great deal of interest, and 
give you all the time and opportunity we think necessary to insure your 
continuance as a Superintendent. The fact of our placing a District in your 
hands shows our confidence in your ability and integrity, and you have our 
best wishes for success. 

The truly national character of The Prudential was once 
more illustrated in the great fire which destroyed the Hotel 
Windsor in New York City on March 17, 1899. There were 
found, four days after the fire, wrapped up in an old shawl with 
a bank-book, two Prudential policies on the lives of persons living 
in the hotel. The incident is referred to in The Prudential 
Weekly Record of April 10th, in which also a reproduction of the 
half -charred policies is given, together with the following com- 
ments : — 

Investigation by Prudential representatives discovered, happily, that 
the two persons named were not among the lost, but are still alive ; also the 
following facts : — 

Both women are married. Mrs. McDonald was in the employ of the 
hotel. Her sister, Mrs. White, is in Europe, and had left her policy in care 
of her sister. Together with Mrs. McDonald's effects, including her policy, 
her bank-book and $600 in cash, Mrs. White's policy was placed in her sis- 
ter's trunk. The latter was destroyed, also the money, all that remained 
being the bank-book, policies and the brass padlock of the trunk. Mrs. 
McDonald was on the fourth floor of the hotel when the fire broke out, but 
escaped. 



2JZ HISTORY OF THE PRUDENTIAL. 

This connection of ours with an occurrence that has shocked and horri- 
fied the whole country again calls to mind the all-embracing and truly 
national character of The Prudential. No great fire, explosion, railroad 
accident or other mishap or disaster involving large loss of life can now 
occur in which this Company is not somehow concerned, and generally 
as a ready helper in time of sorest need. 

Another policy-holder of the Company living at the time in 
the hotel also fortunately made her escape without serious injury. 

Mention has been made, in an earlier part of this work, of 
the passage of a law in the State of Colorado in 1893, prohibiting 
the insurance of minors under the age of ten years. In com- 
pliance with a strong local demand for the repeal of this law, 
officially voiced by the Insurance Commissioner, a determined 
effort was made this year to repeal the law of 1893, an( i enact in 
its place a regulating statute practically identical with a similar 
law in force in the State of New York and the Province of 
Ontario. With this object in view, House Bill No. 317, a copy 
of which is given below, was introduced into the Colorado legis- 
lature by Mr. Arthur Bartels, of Denver : — 

BII.lv REGULATING THE INSURANCE OF MINORS. 

Section i. Any person liable for the support of a child of the age of 
one year and upward may take a yearly renewable term policy of insurance 
thereon, the amount payable under which may be made to increase with 
advancing age and which shall not exceed the sums specified in the follow- 
ing table, the ages therein specified being the age at time of death, and 
which, after the age of thirteen, may become an ordinary life policy for an 
amount not exceeding the sum specified in the table : — 

Between the ages of one and two years, thirty dollars. 

Between the ages of two and three years, thirty-four dollars. 

Between the ages of three and four years, forty dollars. 

Between the ages of four and five years, forty-eight dollars. 

Between the ages of five and six years, fifty-eight dollars. 

Between the ages of six and seven years, one hundred and forty dollars. 

Between the ages of seven and eight years, one hundred and sixty- 
eight dollars. 

Between the ages of eight and nine years, two hundred dollars. 

Between the ages of nine and ten years, two hundred and forty dollars. 

Between the ages of ten and eleven years, three hundred dollars. 

Between the ages of eleven and twelve years, three hundred and eighty 
dollars. 

Between the ages of twelve and thirteen years, four hundred and sixty 
dollars. 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 273 

Between the ages of thirteen and sixteen years, five hundred and twenty 
dollars. 

Between the ages of sixteen and seventeen years, six hundred and 
twelve dollars. 

Between the ages of seventeen and eighteen years, seven hundred dollars. 

Between the ages of eighteen and nineteen years, seven hundred and 
eighty-four dollars. 

Between the ages of nineteen and twenty years, eight hundred and 
fifty -five dollars. 

Between the ages of twenty and twenty-one years, nine hundred and 
thirty dollars. 

Section 2. All acts and parts of acts in conflict herewith are hereby 
repealed. 

Section 3. In the opinion of the General Assembly an emergency 
exists ; therefore, this act shall take effect and be in force from and after its 
passage. 

It will be observed, on examination of this bill, that ade- 
quate provision was made against speculative insurance of any 
kind, either on the part of Industrial or Ordinary companies ; 
that the bill covered all ages under twenty-one, and permitted 
at the younger ages insurance for amounts just about sufficient 
to meet funeral expenses and the cost of the last illness. The bill 
had the approval of the Superintendent of Insurance, the Hon. 
H. H. Bddy, who had taken pains to secure information and data 
with reference to the transaction of this form of insurance in 
other States of the Union. A circular letter had been addressed 
by Mr. Eddy to the Insurance Commissioners of leading States, 
stating that — 

I would esteem it a very great favor if you would kindly advise me as 
to the results of the prosecution of this kind of insurance [Industrial] in 
your State, and whether, in your judgment, the repeal of the present pro- 
hibitive law and the enactment of a permissive law, with proper restrictions 
placed upon and proper regulation of the insurance companies provided for, 
would be a benefit to the community at large, or otherwise. 

In reply to Mr. Eddy's letter, the Insurance Commissioner 
of New Jersey, the Hon. Wm. Bettle, said : — 

As you are doubtless aware, industrial insurance, on the lives of both 
adults and infants, has been prosecuted in this State for many years, and 
has attained a volume as large perhaps, if not larger, in proportion to 
population, than any other State in the Union, and this Department has 
yet to receive the first charge or complaint that the insurance of children 
under ten years af age was productive of infanticide. I have long since 



274 HISTORY OE THE PRUDENTIAL. 

rejected the assertion as entirely unfounded and unjustifiable. The benefi- 
cence and value of this kind of insurance have been demonstrated beyond 
question, and there can be no doubt that the repeal of the present statute of 
your State prohibiting the insurance of children under ten years of age, and 
the enactment of a law permitting this to be done, with proper restrictions 
upon and regulation of the companies transacting it, would be a great benefit 
to its people. 

The reply from the Insurance Superintendent of New York 
was as follows : — 

The recognition given insurance of this character is contained in section 
55 of our insurance law, chapter 690, laws of 1892. 

This Department has never had any cause to criticise the provisions 
of this section of the law. I note your statement that the principal argu- 
ment which has been used against the passage of such a law in your State 
is that it would be productive of infanticide for the purpose of obtaining 
the insurance. I am of the opinion that this is a very poor argument, and 
certainly the records of insurance corporations carrying on business of 
this character will not bear out any such statement. 

A likewise favorable reply was received from the Insurance 
Superintendent of Illinois : — 

No evidence has been presented to this Department, and I am not 
aware that any exists, that this character of insurance has resulted in 
increasing, or has been productive of infanticide. I believe that the 
experience of the companies who do this kind of business has demonstrated 
that under proper restrictions it is a benefit both to the parents of children 
who are insured, who are usually in poor circumstances, and likewise and 
in consequence a benefit to the community at large. Since my incum- 
bency in the office of Superintendent of Insurance, no complaints have been 
made of the evil effects of this insurance, or of any wrongful practices 
peculiar to this character of insurance. 

From Ohio, where a vast amount of Industrial insurance 
has been transacted for many years, the official opinion on the 
part of the State Superintendent of Insurance was expressed in 
the following words : — 

Industrial insurance has been written in Ohio for several years, and so 
far we have never had any complaints from any sources showing that there 
has been any criminal or immoral effects arising from it. My opinion 
is that no such effects come from the business. 

From the State of Massachusetts, where a few years before 
a considerable agitation had resulted in an official investigation of 



THE PRUDENTIAL INS. CO. OE AMERICA, 1899. 275 

the entire subject, the Deputy Insurance Commissioner replied as 
follows : — 

The business has been almost wholly confined to the operations of the 
three large companies which have made a specialty of it, and the popular 
verdict upon its results has been one of full approval and commendation. 

The industrial companies have had to struggle against prejudice, igno- 
rance, jealousy and a thousand impediments that inevitably attend the 
promotion and building up of a new system, until its usefulness and value 
have asserted themselves and vindicated its adoption. Its progress has 
been steady and aggressive, until now probably not less than ten millions of 
lives are insured under it in this country, while in England probably one- 
half of the entire population are included in similar institutions there. 

Very many inquiries and investigations have from time to time been 
instituted, and very thorough and searching examinations have been had. 
The most important of these and of greatest length and breadth of inquiry 
were in the Commons House of Parliament of Great Britain, and by the 
General Court of Massachusetts in 1895. The verdict in both cases was a 
practically unanimous approval of the plans of the companies, the vote in 
the Massachusetts House being 149 to 23. 

The system of industrial insurance can be successfully carried on 
only in cities or thickly settled communities of mechanical or indus- 
trial operatives, where the collection of the small weekly premiums can be 
quickly and economically made. It is, if not essentially, at least very 
largely , family insurance, and if the insurance of the children at the same 
time with the parents is not permitted a very great part of its attractive- 
ness and value would be lost. 

A similar reply was received from the State of Pennsylvania, 
where also more or less agitation had led to numerous attempts 
at adverse legislation : — 

The claim that the insurance of children at an early age is productive 
of infanticide for the purpose of obtaining the insurance is entirely falla- 
cious, the amount of the policy in the case of a child under ten years being 
so small that 'the temptation to commit a crime of that sort is almost 
entirely eliminated. 

The Insurance Commissioner of Connecticut stated that — 

I believe it is a benefit to any State, and I believe that the companies 
themselves are trying to prosecute the business to treat the policy-holders 
fairly, and to pay their claims promptly. 

This kind of insurance has been conducted across the water successfully, 
and it is now increasing rapidly in this country. / believe that every State 
ought to open its doors, with such restrictions as they might deem best, to 
allow this business to be transacted. It is legitimate, it has done a great 
good to the community and has benefited and is benefiting thousands. 



276 HISTORY OF THE PRUDENTIAL. 

Summing up the results of his investigation, Mr. Eddy ex- 
pressed himself forcibly on the subject as follows : — 

As to the Insurance Department of Colorado, I may say that it has 
again and again recommended the repeal of the law of 1893, which abso- 
lutely prohibits the insurance of minors under ten years of age, and favored 
the enactment, in lieu thereof, of a regulating statute, similar to that which 
obtains in other States of the Union, being an exact copy as to detail of the 
statute now in force in the State of New York and the Province of Ontario. 

The department is in possession of no facts, nor have any come to my 
personal knowledge, tending to show that the insurance of minors is not 
in every sense as legitimate, as beneficial or as necessary as the insurance 
of adults. 

It will be observed, on careful reading of the preceding 
extracts, that without exception the Insurance Commissioners of 
the principal States of the Union in which Industrial insurance 
had been conducted for many years were strongly in favor of the 
insurance of children for small amounts, and this view, as has 
been pointed out, was based on careful personal investigation and 
the records of the departments officially in charge of the insur- 
ance interests of the different States. The passage of the bill 
was from the outset bitterly opposed by a few members, including 
the Secretary of the Colorado Humane Society, the same body 
which in 1893 had succeeded in placing the prohibitive law on 
the statute-book. A strong effort was made by the Society to 
create a sentiment adverse to the passage of the law, especially 
among kindred societies. The subject being practically unknown 
to a large number of people outside of the industrial population, 
it became necessary to disseminate information pertaining to the 
subject of Industrial insurance, but within a short time after the 
opposition manifested itself some of the leading and most respected 
citizens of the State came forward with emphatic statements of 
their views in favor of the passage of the bill and the repeal of 
the law of 1893. Among others, Mrs. Sarah S. Piatt, President 
of the State Board of Charities and President of the Women's 
Club of the State of Colorado, in an open letter under date of 
February 20, 1899, expressed herself as follows : — 

In my charity work in Holyoke, Mass., where the majority of the peo- 
ple are factory workers and where large numbers are insured on this plan, 
I had often occasion to meet with the good results of this form of saving. I 
met with abundant proof that by this method of insurance much misery was 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 277 

directly prevented in that the people were placed above the need of public 
support to bury their dead ; but furthermore, in that much good was done 
in an indirect manner by teaching the working people systematic habits of 
saving in other directions. Although I have seen much of the actual work- 
ings of this method of family insurance, I have never met with an instance 
where harm was likely to result, and for these reasons, and as the result of 
my personal knowledge, I agree that the prohibitory law of 1893 should be 
repealed and be replaced by a regulating statute such as is in force in 
other States. 

The Rev. Edward Pearsons Newton, President of the Asso- 
ciated Charities of Pueblo, Colo., also dealt with the subject in 
an open letter dated February 1 6th : — 

For years my interests have led me to read much upon social and 
charitable lines. I believe Industrial Insurance makes for thrift and inde- 
pendence, and these are above all things to be fostered among the poor. I 
heartily desire its introduction among the wage-earners of Pueblo, of whom 
we have so many. 

Among others, the Rev. Thos. H. Malone, Editor of the 
Colorado Catholic, a member of the State Board of Charities, 
and one of the foremost of the Catholic clergy of the State, 
riot only expressed his views in an open letter dated Feb- 
ruary 25th, but also appeared personally before the Senate In- 
surance Committee in favor of the repeal of the law of 1893. 
From his letter I quote the following extract : — 

I have given the matter some thought and consideration with special 
view of the moral aspects of the whole question, and in the absence of any 
facts detrimental to this method of insurance, and in the further absence of 
any reasonable theory of public morals as opposed to it, I am in favor of 
the repeal of the law of 1893 and the enactment of a regulating statute, 
which will not only correct a former injustice, but do much to place the 
business as a whole on a better legal foundation, since I understand that the 
law itself has been declared unconstitutional. As one having some knowl- 
edge of the life and labor of the working people of this State, I do not 
hesitate to say that I feel satisfied that they can be trusted in this matter, 
and that they should not be deprived of the liberty to place a small insur- 
ance protection on the lives of every member of the family as may to them 
seem expedient and desirable. 

These views of recognized authorities on matters relating 
to public welfare, with special reference to the administration of 
public charities, are supplemented by a letter addressed to State 
Senator J. C. Evans, in reply to a letter of inquiry as to the 



278 HISTORY OF THE PRUDENTIAL. 

insurance of minors in the city of Boston. During the agita- 
tion of 1895 in the State of Massachusetts, when an attempt 
was made to prohibit the insurance of children under ten years 
of age, Mr. Thos. T. Stokes, Director of the Associated Charities 
of Boston, had appeared before the committee of the Legislature 
and had expressed himself strongly in favor of the insurance of 
children. Senator Evans addressed a letter to Mr. Stokes, mak- 
ing inquiry as to whether subsequent experience had been such 
as to induce him to change his views in regard to the subject. 
In reply Mr. Stokes expressed himself as follows : — 

I beg to say that my ideas are the same as when I was quoted before a 
committee of our " General Court." I believe there may be abuses, but to 
prevent thousands saving because a few may spend their money foolishly is 
no argument. Then again, I believe in thrift and to try and encourage 
people to save. I firmly believe that in Massachusetts there has never been 
a case where a child has been murdered by neglect, or quicker means, for 
the insurance. I am not a teetotaler, but when money goes any way out of 
the saloon it's for the better interests of the public. It's said undertakers 
are most interested in keeping alive child insurance ; well, the poor have 
feelings as the rich and love their children, why should they not take pride 
in having a respectable funeral ? And it's better to be prepared than when 
the time comes to be burdened by a load of debt. The good people who 
were, and are, against this class of insurance offer no suggestions, and are 
the first to cry out about " the improvidence of the poor." I had charge as 
president of wards 13, 14 and 15 — seventy -five thousand people — for years. 
I have seen people have but little money by them, but do their best to keep 
up the payments ; iVs a wonderful object lesson, and those who from their 
fine residences offer suggestions and nothing else are not fit judges. 

A large body of evidence was presented from all parts of the 
country tending to show that charges made against the system 
were unfounded, and based on prejudice, ignorance or personal 
spite, and these views gradually prevailed with the outside public, 
as well as with the members of the Legislature. A large number 
of petitions were received from the three principal cities of the 
State, aggregating thousands of names of men and women voters 
of the State, asking the Legislature to repeal the law of 1893 an( i 
enact the regulating statute outlined and defined in House Bill 
No. 317. As illustrating the widespread extent of the agitation 
in favor of the passage of the law, I cannot do better than 
quote from some letters from citizens of Denver, making clear 
the views of working men and working women, aiming in 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 279 

their own way, and within the limit of their own means, to 
improve the conditions of their struggle for a higher and a better 
social life and provide, as far as possible, against the hardships 
and contingencies of human life. The following extract is 
from a letter from Mrs. Annie B. Bradley, of No. 402 South 
Broadway, Denver, Colo., dated March 10, 1899 : — 

I cannot better express my convictions on the subject than by stat- 
ing that the lives of my two children, as well as of every other member 
of my family, have been insured for the past seven years, and I feel quite 
sure that those who know me will not think that I placed this small amount 
of insurance provision on the lives of my children out of any mercenary 
motive or for any purpose of gain. I believe in insurance for children as 
much as I believe in insurance for adults, seeing in this method of saving 
the best means of making provision for possible emergencies. I find it 
difficult to express my feelings as to those who have, in the most malignant 
and uncalled-for manner, insulted those who have thus given practical 
proof of their belief in the merits of Industrial insurance. To my mind, 
the so-called humane societies who are opposed to House Bill 317 are 
absolutely ignorant of that portion of our population who avail them- 
selves of this method of saving and insurance. I am, perhaps, as familiar 
with the life of the wage-earners of this city as any one, and to my mind 
only those who have forethought and thrift make use of this method of 
family insurance. 

From* all that I can learn, those opposed to the bill regulating the insur- 
ance of minors and repealing the law of 1893 have not brought forward a 
single fact in support of their slanderous and libelous allegations. In jus- 
tice to the thousands of self-respecting and upright people of this city who 
believe in Industrial insurance, I protest against the mischievous, mislead- 
ing and insulting method pursued by the Secretary of the Humane Society. 
The man does not speak for the wage-earners of this city, but rather mis- 
represents the best interests of the working people of this State. I feel 
quite sure that we are more competent to judge of the merits of Industrial 
insurance than these self-appointed social reformers, who have never been 
asked by any workingman, woman or child to represent their side of this 
question. 

A still more emphatic expression of the workingmen's view 
of the case is found in the following letter from Mr. Jacob Hauck, 
a shoemaker of No. 2044 Humboldt street, Denver, Colo. : — 

I have heard a good many arguments in regard to this bill. I for one 
believe in Industrial insurance and always advocate it, and I know what I 
am talking about, having lost two members in my family who carried that 
kind of insurance, and it was a great help in need. It is a grand institution 
for the poor. If a man has a large family like myself and has to work for a 
living, it is almost impossible for him to lay away money ; he needs it all 



28o HISTORY OF THE PRUDENTIAL. 

for the support of his family. But I could always pay five or ten cents a 
week to some Industrial company and never miss it, and when death comes 
you don't have to ask cold charity for help. When I lived in the East I had 
all my children insured, and, thank God, none of them died. Here in 
this city I lost a child which never was insured, and do you know where that 
poor thing is buried ? Away out in the prairie is a place called Potter's 
Field, and there, among unknown men and women, lies that child of mine. 
It makes my heart ache when I go out there and look at the place where 
my child is buried. I take it as a personal insult when I hear people say 
that the poor would kill their little ones for a few pieces of silver. No ; 
they insure them because they love them, and when they die they can be 
laid away decently. I look on this kind of insurance as a savings bank for 
the poor. I have carried this kind of insurance in my family for the last 
fourteen years, and never saw anything in any way where the company 
tried to make you give up your insurance so they could profit by lapses. 
On the contrary, if one mentions one word to the agent as to lapsing a 
policy he does all in his power to prevent it and to induce one to keep it 
up. If he does not succeed he will call in his assistant superintendent, and 
if he can not make one keep up the policy, the next one to call is the 
superintendent of the district, and they will all tell the same story, 
"Keep it up — don't drop it — don't give up your insurance." 

Another lengthy letter addressed to Mr. Bartels, the cham- 
pion of the people, was from a Mrs. L,. F. Alexander, of No. 1462 
South Tremont street, Denver, Colo. This letter also illustrates 
the strong views held by working people of the State on the 
subject of prohibitive legislation, and I may be permitted to 
make a brief extract which is deserving of a permanent place in 
this summary of public opinion on the subject of Industrial 
insurance : — 6 

Industrial insurance, to my mind, is a Godsend to the class of people 
who, by paying a small sum weekly, provide themselves with the means to 
give their little ones a decent burial without the assistance of the county. 
The idea has been advanced [by the Humane Society] that child insurance 
causes parents to murder or neglect their children, whereby they would 
receive the pitiable sum which in some cases would not defray the expenses 
of burial. Such an argument, to my mind, is simply absurd. In the same 
argument the suggestion was made [by the Humane Society] that the county 
could bury the children of the poor. Another absurd idea ! Why should pov- 
erty restrict the affection and respect of parents for their children ? In the 
same argument it was said that children would be deprived of the necessities 
of life by their parents paying from five to ten cents a week on the Industrial 
policy. True, Death does not visit every home of the poor, but in case it 
should, how much more difficult for the parents whose children are not 
insured to defray funeral expenses, which must be paid, than to pay the 
paltry sum of five or ten cents a week for the insurance ? Having laid away 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 2 ^ x 

two little ones under very trying circumstances, who were not insured, I 
know whereof I speak. I fail to see wherein the Humane Society is doing 
an act of humanity by opposing the insurance of children. 

The result of this agitation, extending, as it did, over a con- 
siderable period of time, is best summed up in the following 
extract from the Weekly U?iderwriter of April 15, 1899 : — 

A feature of the legislative period was the strong fight made to secure 
the repeal of the present prohibitive law relating to child insurance and to 
secure the passage of an act permitting the insurance of minors under the 
age of ten years, under proper restrictions and safeguards. At the outset 
the Humane Society and the newspapers vigorously opposed the proposed 
change. The industrial company waged a campaign of education, printing 
and distributing a number of telling circulars. In spite of prejudice arising 
through ignorance, misinformation and malice, the bill passed the House,* 
and a strong majority for it was found in the Senate ; but as it arrived in the 
Senate late in the session, a determined effort to filibuster indicated by two 
senators compelled the majority to surrender the bill in order to pass other 
measures in the limited time left at their disposal. Had the bill reached 
the Senate a few days earlier, it would undoubtedly have passed.f 

Although but little more than seven } r ears had passed since 
the new office building of the Company had been occupied for 
business purposes, it had gradually become evident that the 
rapid increase in business would require a very considerable 
addition to the Company's office accommodations. While at first 
a large part of the building had been leased for general office 

* In Colorado women have a right to vote and hold office. It is there- 
fore of interest to note that of the three women members of the House of 
Representatives, Dr. Mary F. Barry, of Pueblo, and Mrs. Harriet G. R. 
Wright, of Denver, voted in favor of the repeal of the prohibitive statute 
of 1893. 

t In Ohio an attempt was made in the early part of 1900 to pass a bill pro- 
hibiting the insurance of children under the age of twelve. In few sections 
of the country is Industrial insurance so thoroughly understood as in Ohio, 
where, on account of the large urban population, a very considerable pro- 
portion of the people are insured on the Industrial plan of family insurance. 
The bill was very carefully considered by the Senate, hearings were granted 
to the companies opposed to the measure and to the Ohio Humane Society, 
in favor of the bill. Every phase of the business received exceptionally 
careful consideration on the part of practically every member of the Senate. 
In view of these facts it is of more than passing interest to note that the 
bill attempting to prohibit the insurance of minors, under the age of twelve, 
in the State of Ohio, was defeated by a vote of 24 against the measure and 
only one vote (the author of the bill) in its favor. 



282 HISTORY OF THE PRUDENTIAL. 

purposes, gradually, as these leases had terminated, the space 
had been occupied by the Company for its own purposes. 
Anticipating the necessity of new buildings, additional real 
estate had been purchased, and during September, 1899, ground 
was broken for the erection of three new structures adjoining the 
present home-office building. When completed the home office of 
The Prudential will be unsurpassed by any similar building in the 
world as a structure devoted almost entirely to the transaction 
of a life-insurance business. 

Before I review the year's results in more detail, it is but 
proper that mention should be made of an event of exceptional 
importance in the history of the Company. I have on previous 
occasions referred to the loyalty of the agency force and the 
Company's high appreciation of the continued service of its 
men. Among those who entered the Company's employ at a 
critical period of its existence, at a time when the business was in 
its very infancy, and when exceptional courage and extraordinary 
effort were required to make the business a success, was Superin- 
tendent Peter Hgenolf, who had entered the Company's field force 
as an agent on the 10th of November, 1879, or exactly four years 
after the first application for Industrial insurance had been 
received by the then Prudential Friendly Society. Mr. Egenolf 
celebrated the twentieth anniversary of his connection with the 
Company by a banquet tendered by him to the officers of the 
Company and the employees of his own office at the Hotel Savoy 
on November 10, 1899. At the dinner, Mr. Dryden, as Presi- 
dent of The Prudential, paid Mr. Egenolf a high tribute as a 
worker in the service of the Company, as one who had borne 
himself with rare skill, energy and fidelity all through his long 
service. He gave some interesting reminiscences of Mr. Egenolf s 
early connection with the Company, and concluded by presenting 
him with a certificate of membership in The Prudential Old 
Guard, Class D, likewise with the diamond badge which distin- 
guishes the members of the Old Guard who have been twenty 
years in the Company's employ. The Vice-President of the Com- 
pany, Dr. Leslie D. Ward, also dwelt in his remarks upon the 
splendid qualities of Mr. Egenolf, referring to him as one of the 
men who had so ably helped to build up The Prudential, and 
concluding with the statement that ' ' No man in its field service 
is more highly esteemed than Mr. Egenolf. ' ' 



THE PRUDENTIAL INS. CO. OF AMERICA, 1899. 283 

Another veteran Superintendent, Mr. C. V. Dykeman, of the 
I^ong Island City District, celebrated the completion of his twen- 
tieth year of service with the Company by giving a banquet at 
Delmonico's to his brother Superintendents of the Long Island 
District and some representatives of the home office. Mr. Dyke- 
man shared equally with Mr. Egenolf the honor of having been 
one of the Company's most loyal and faithful Superintendents 
during a period when such sendees were needed most. Mention 
must also be made of Mr. L. W. Frisbee and Mr. K. G. Jackson, 
two veteran Superintendents, who have almost completed their 
twenty years of sendee with the Company. The Prudential is un- 
der permanent obligations to these two men for services of the 
highest order and the performance of duty under most trying con- 
ditions during the early years of the Company's history. There 
are also many Agents and clerks whose services extend over two 
decades, and who have in no small manner contributed to the won- 
derful success of the Company, but want of space forbids more 
than incidental mention of this fact. It is not too much to say 
that in few institutions, in few business organizations, exist such 
happy and cordial relations as are found among the officers of The 
Prudential Insurance Company and its employees.* 

At the close of the year the total number of Industrial policies 
in force had reached 3,406,189, insuring the sum of $389,139,257, 
indicating a gain over the preceding year of 481,663 Industrial 
policies and of $55, 147,057 of Industrial insurance. In combining 
Industrial and Ordinary business, The Prudential had in force at the 
close of 1899 3,509,417 policies, and insurance amounting to more 
than one-half billion of dollars, the exact figures being $502 , 30 1 , 48 6 . 
Of all the insurance companies in the United States, only four have 
insurance in force exceeding this sum, and the youngest of these 
companies is many years older than The Prudential. 



* Another Superintendent, Mr. W. F. Lawson, of Philadelphia, cele- 
brated the anniversary of his twentieth year of continued connection with 
The Prudential on January 30, 1900. Mr. Dryden, who was present at the 
banquet, referred to Mr. Lawson as one of the men through whose efforts 
The Prudential had reached the commanding position of being the leading 
insurance company in the State of Pennsylvania. Mr. Lawson represents 
one of the highest types of an Industrial underwriter, and is looked upon 
as a model by all who have had the privilege of personal relations with him 
during his long and exceptionally successful career. 



284 HISTORY OF THE PRUDENTIAL, 



CHAPTER XVI. 

SUMMARY OF CONCLUSIONS AND RESULTS. 

Of life insurance for workingmen it has been said, with 
much truth, that "it is not an end in itself, but a means to an 
end," that it is " primarily a savings institution by which men 
are assisted to make provision for future contingencies,"* and 
with equal truth, by another authority on social economics, that 
"It is evident that insurance of various kinds is an indispensa- 
ble condition of that economic security for the laboring classes 
which is so desirable for their happiness and for the welfare of 
society, and which must form part of the solution of the labor 
problem. " f It is my firm conviction that in the vast improve- 
ment of the material and moral condition of our working people, 
which undoubtedly has taken place during the past quarter- 
century, Industrial insurance has done much to help bring about 
this much-to-be-desired result, and that it has had its share in the 
gradual solution of the so-called labor question by increasing 
the degree of economic security and social welfare, the evidences 
of which we meet with in all directions. But whatever the 
final verdict of the economist and student of social progress, 
one fact stands out broadly which must needs attract atten- 
tion, and which can neither be ignored nor explained away, — the 
fact that, of all forms of social institutions making for the 
improvement of the condition of the masses by the application 
of sound principles of insurance and finance, Industrial insur- 
ance holds to-day the most commanding position, counting its 
patrons by more than thirty millions the world over, while in the 
United States, during the short space of a quarter of a century, 
its operations have reached an extent unknown in the earlier 
history of American life insurance. 

* W. F. Willoughby, Workingmen 's Insurance, pp. 2-3. Crowell & Co., 
New York, 1898. 

t Richard T. Ely, The Labor Problem in America, p. 141. 



SUMMARY OF CONCLUSIONS AND RESULTS. 



285 



By the 1st of January, 1900, the eleven principal Industrial 
companies for which the information has been published returned 
10,026,442 Industrial policies as in force on December 31, 1899, 
for the sum of more than one billion of dollars, or, to be accurate, 
$1,290,436,355. The table which follows will give the details for 
each of the eleven companies, together with the location of the 
principal offices, indicating the vast numerical and territorial 
extent of the business : — 

INDUSTRIAL INSURANCE IN THE UNITED STATES. 
January i, 1900. 



Companies. 


IvOCATION OF 

Home Office. 


No. of Poli- 
cies in Force. 


Amts. of Ind. 
Ins. in Force. 


Metropolitan, .... 

John Hancock, .... 
Life Ins. Co. of Va., . 

Western & Southern, . 
Baltimore Mutual Aid, 
Pacific Mutual, .... 

Provident Life, .... 


New York, N. Y. 
Newark, N. J. 
Boston, Mass. 
Richmond, Va. 
Louisville, Ky. 
Cincinnati, O. 
Baltimore, Md. 
San Francisco, Cal. 
Jersey City, N. J. 
Baltimore, Md. 
Wheeling, W. Va. 


4,855,756 

3,406,189 

1,069,197 

219,679 

148,049 

H7,545 
86,251 
61,709 
27,697 
21,132 
13,238 


$688,629,175 

389,039,257 

141,609,904 

20,246,656 

16,368,863 

10,881,961 

5,150,963 
11,779,229 
2,854,075 
2,304,762 
1,571,510 






10,026,442 


$1,290,436,355 







If we briefly compare the numerical aspect of the results 
attained by Industrial insurance companies, with the results at- 
tained by Ordinary life companies and savings banks, we have 
proof in the following table that the most recent form of life 
insurance and savings has made progress far exceeding the prog- 
ress of other forms of insurance and thrift in this country : — 

COMPARATIVE RESULTS OF INSURANCE AND SAVINGS 

INSTITUTIONS IN THE UNITED STATES. 1899. 
Number of Institutions. Number. 

11 Industrial Life Companies,* Policy-holders, . . • 10,026,442 

942 Savings Banks, Depositors, 5,687,818 

58 Ordinary Life Companies, Policy-holders, . . . 2,807,476 

* Six of these companies transact also an Ordinary business. The num- 
ber of Ordinary policies in force with these companies on December 31, 
1899, was 268,153, for $300,175,426 of life-insurance protection. Theaverage 
amount per policy, only $1,120, will illustrate the Industrial character of the 
average Ordinary risk in the Industrial companies. 



286 HISTORY OF THE PRUDENTIAL. 

This result is without a parallel in economic or social history. 
It would have been impossible but for the all-important fact, 
which I feel satisfied has been brought out clearly, that Industrial 
insurance, as illustrated in the history of The Prudential Insurance 
Company of America, is, like society itself, ' ' not a manufacture, 
but a growth," — a growth, I may add, fully in harmony with the 
healthy and normal progress of the working people of this 
country during the past quarter-century. If, in the words 
of Mr. Devine, it is a ''mental trait of the economic man," 
to readily "accept the final judgment of the community as to 
the market value of the commodities and services he wishes 
to buy or sell,"* we must concede that Industrial insurance 
must meet not only inherent and definite needs not supplied by 
other agencies or forms of thrift, but that these wants and 
needs are supplied to the satisfaction of the millions who, in 
ever-increasing numbers, are becoming patrons of the Industrial 
companies. 

We must also accept the further conclusion that the progress 
of Industrial insurance is evidence of a healthy economic and 
social instinct, and that the requirements of society are fully met 
in the immediate and remote results which have been accom- 
plished. I fully agree with Mr. Devine, that " It is a mistake, 
though not an uncommon one, to credit the economic instinct with 
the disposition to place material satisfactions above those which 
spring from man's higher nature, ' ' for ' ' the true economic instinct 
guards against just that tendency. It fixes the eye upon the 
future and highest want, rather than upon the lower and im- 
mediate want, ' ' f and in the light of this reasoning, indicative 
of a thorough knowledge of the life and struggle of the industrial 
masses, I believe that we may, with perfect justice, concede to the 
policy-holders of Industrial companies the credit of having aimed 
high in their efforts to improve the condition of their daily strug- 
gle against poverty and want, by providing to the extent of their 
ability against the uncertainties of human life itself. The more 
Industrial insurance is studied, the more, I believe, will others 
share with me the conviction that it forms one of the most useful 
of modern institutions making for the improvement of social life 

* Economics, p. 13. The Macmillan Co., N. Y., 1898. 
t Ibid., p. 51. 



SUMMARY OF CONCLUSIONS AND RESULTS. 287 

and the increase of economic security. It has properly been 
called ' ' family insurance, ' ' and such it truly is in the complete 
sense of the word, including in its beneficence a provision for 
certain recognized wants and needs of the entire family, while at 
the same time a more or less sufficient provision is made for the 
immediate needs of the widow and orphan as the first duty of 
self-reliant workingmen. If it is true, in the words of Mr. 
Lecky , that ' ' improved conduct and improved circumstances are 
to an English mind the chief and almost the only measure of 
progress," I, for one, cannot escape the conclusion that, from 
considerations of the highest degree of public welfare, this system 
of life insurance is worthy of the careful study and sympathetic 
consideration of all who have the best interests of the working 
classes at heart. 

Want of space does not permit of a more extended consider- 
ation of the general social and economic aspects of Industrial 
life insurance as a modern form of thrift, the result of ages of 
gradual change and development of the most ancient forms of 
human association, but I trust that I have succeeded in making 
it plain to the reader that we have in Industrial insurance a 
form of thrift which no economist or student of social problems 
can properly and wisely ignore, a form of thrift which, rather 
than deserving of that marked degree of indifference which alone 
explains the paucity of all reference to the entire subject of life 
insurance in works on economics and social science, is fully 
worthy of the most careful and thorough study on the part of 
those who concern themselves with socio-economic questions di- 
rectly affecting the welfare of the working people of this country. 
As far as it has been possible, I have tried to give full consider- 
ation to all essential phases and aspects of more than passing 
interest to the reader and student of insurance progress. I have 
traced from the earliest beginning the development of the first 
Company organized in the United States for the successful trans- 
action of this form of insurance, and the development of its 
methods and practice in conducting the business. It only re- 
mains for me to treat of the general results as they are restated 
in the statistical evidence of the quarter-century progress of The 
Prudential, and such related evidence as will further illustrate 
the importance of this form of life insurance for working people 
from the standpoint of public policy. 



288 



HISTORY OF THE PRUDENTIAL. 



The first table to which I would direct attention will show in 
a condensed form, yet with sufficient detail, the uninterrupted 
business progress of The Prudential during the entire period of 
its history. The returns as to policies in force and the amounts 
of insurance are given separately for both departments of the 
Company's business, for the Industrial for 1876-1899, and for the 
Ordinary for 1886- 1899 : — 

THE) PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 
Outstanding Insurance. 



Years Ending 


Industrial Insurance. 


Ordinary Insurance. 


Dec. 31ST 


No. 


Amount. 


No. 


Amount. 


1876, 

1877, 

1878, 

1879, 

1880, 

1881, 

1882, 

1883, 

1884, 

1885 

1886, 

I887, 

1888, 

1889, 

1891, 

1892, 

1893, 

1894, 

1895, .... 

1896, 

1897, 

1898 

1899, 


4,816 
11,226 
22,808 

43,715 

87,462 

133,582 

196,007 

273,917 
324,794 
422,671 

548,433 
736,909 
850,064 
1,099,312 
1,228,332 
1,360,383 
1,653,465 
1,941,533 
2,256,014 

2,330,741 
2,437,251 
2,658,700 
2,924,526 
3,406,189 


$443,072 

1,030,655 

2,027,888 

3,866,913 

7,347,892 

IO,959»948 

15,738,973 

23,053,935 

28,545,189 

40,266,445 

59,328,627 

81,694,088 

92,418,854 

117,357,415 
135,084,498 

150,758,907 
184,306,206 
218,199,566 
259,840,927 
268,414,100 
279,030,638 

303,770,952 
333»992,200 
389,039,257 


427 

735 

915 
1,839 
3,272 

5,677 

8,120 
10,472 
17,752 
30,893 
35,807 

52,583 

71,927 

103,228 

l 


$585,500 
945,000 
1,242,929 
2,328,862 
4,079, x 56 
6,801,435 

9,533,076 
12,441,733 
20,504,727 
34,716,055 
41,422,845 
59,346,638 
80,554,853 
113,162,229 



According to this table the total number of Industrial policies 
now in force is 3,406,189, or more than half a million in excess 
of the total number of Ordinary policies in force with fifty-eight 
American life companies in 1899. The Ordinary policies of the 
Company number 103,228, placing The Prudential, after but 
fourteen years of Ordinary business operations, in the front rank 
with the giant life companies of the present day. I add, as a 



SUMMARY OF CONCLUSIONS AND RESULTS. 



289 



further indication of progress, a table showing for each year of 
business operations the annual average amount of insurance in 
force per policy for both the Industrial and Ordinary business 
of the Company : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 



Years Ending Dec. 31ST. 



Average Industrial 


Average Ordinary 


Policy. 


Policy. 


$92 00 




91 81 




88 91 




88 46 




84 01 




82 05 




80 30 




84 16 




8789 




95 27 




108 18 


$1,371 19 


no 86 


1,285 71 


108 72 


i,35 8 39 


106 76 


1,266 37 


109 97 


1,246 69 


no 82 


1,198 05 


in 47 


i,i73 78 


112 39 


1,188 10 


115 18 


i,i55 07 


n5 16 


*,i23 75 


114 49 


1,156 84 


114 26 


1,128 63 


114 20 


1,119 95 


114 22 


1,096 24 



1876, 

1877, 
1878, 
1879, 
1880, 
1881, 
1882, 

1883, 

1884, 

1885, 
1886, 
1887, 
1888, 
1889, 

1890, 
1891, 

1892, 

1893, 
1894, 

1895, 

1896, 
1897, 
1898, 
1899, 



It will be observed that the average amount per policy in 
force has been subject to more or less fluctuation as regards the 
Industrial business, but, nevertheless, a distinct tendency is 
apparent towards a higher average, while the contrary is to be 
observed in the Ordinary business. As regards the Industrial 
business, this increase in average amounts is due partly to 
increased benefits at the earlier ages, and partly to the additional 
benefits payable on policies subject to the many voluntary con- 
cessions, but largely in consequence of an increasing demand for 
policies for larger amounts as a means of providing not only for 
the burial expenses, but, in addition, for at least a small fund for 
the support of surviving members of the family. Cases are 
becoming more and more numerous where it can be said that 



290 HISTORY OF THE PRUDENTIAL. 

Industrial insurance has provided for widows and orphans in 
addition to its primary purpose of meeting the expenses of burial 
and last illness. One such case I may mention as having been 
referred, to in the Sixteenth Annual Report of the Boston Asso- 
ciated Charities (1895, P- 54) 1 where I find it stated that 
' ' After the death of the man the insurance money was enough to 
pay a few debts and leave enough for the wife to use until some 
course of action could be decided upon. The family is now quite 
comfortable. "* Such illustrations of the value of Industrial insur- 
ance in individual instances could be furnished by the thousands 
from the records of the companies, but want of space forbids more 
than incidental mention. Still it is true, as it has well been said, 
that ' ' The final value of all scientific work lies in the principles 
evolved from individual instances, ' ' and hence the value of cases 
like the one quoted. 

The decrease which has taken place in the average amount 
of Ordinary policies must also be accepted as proof of the asser- 
tion that Industrial companies, in developing their Ordinary 
business, have done so in a different direction than that fol- 
lowed by other Ordinary companies, in that they have extended 
the benefits of life insurance, after a vast amount of insurance 
education, to a class of people who have not been reached 
by the non-Industrial level-premium companies. The vital 
difference between the Ordinary business transacted by Indus- 
trial companies and the business of other Ordinary companies 
is illustrated by the fact that, while the average amount of an 
Ordinary policy in The Prudential in 1899 was $1,094, the 
average amount for all Ordinary companies reporting to the 
New York Insurance Department in 1898 was $2,382, a very 
material difference, indicating that the Industrial companies 
extend the benefits of Ordinary life insurance to a class of people 
not reached by the other Ordinary life companies. 

* I find mention of a somewhat similar case in the Fortieth Annual 
Report of the Chicago Relief and Aid Society, where it is stated that — 

"No. 43,660 is the case of a German with a wife and two boys, eleven 
and eight years old. He bore an exceptionally high character, and had 
never needed or asked aid till after a six months' illness of cancer of the 
stomach, of which he died a month later. The widow received $500 insur- 
ance, and after paying the funeral expenses and other debts incurred depos- 
ited the remaining three hundred in Dreyer's Bank, which failed." 



SUMMARY OF CONCLUSIONS AND RESULTS. 



291 



While at first The Prudential confined its operations exclu- 
sively to the transaction of an Industrial business and only com- 
menced the Ordinary business in 1886, it will be observed, on 
comparing the number of Industrial and Ordinary policy-holders, 
that at present the Ordinary business forms 2.9 per cent, of the 
total number of policies in force, while in amount the Ordinary 
forms 22.5 per cent, of the entire business of the Company. Since 
the ratio of Ordinary to total business has been gradually, though 
very slowly, on the increase, it may be assumed that this growth of 
the Ordinary department will continue and in time assume propor- 
tions equally extensive with the Industrial part of the business. 

The aggregate premium income of the Company, from both 
the Industrial and Ordinary business, during the past twenty- 
four years of business operations, is set forth in the following 
table : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 
Premium Income. 



Years Ending 
Dec. 31ST. 


Industrial. 


Ordinary. 


Total. 


1876, 

1877 

1878, ....... 

1879, 

1880, 

1881, 

1882, 

1883, 

1884, 

1885, 

1886, 

I88 7> 

1888, 

1889, 

1890, 

1891, 

1892, 

1893, 

1894, 

1895, 

1896, 

1897, 

1898, 

1899, 


$14,495 
28,517 

59,817 
121,560 

250,958 

402,947 

571,595 

828,911 

1,127,738 

1,468,956 

2,099,523 

2,9°8,555 
3,616,168 
4,374,486 
5,513,898 
6,217,729 
7,214,561 
8,679,468 
10,295,877 
10,901,674 

11,991,713 
12,762,951 

13,642,191 

15,411,254 


$14,773 
33,702 

43,327 

68,347 

122,978 

195,554 

311,283 

405,376 

594,425 

99 x ,°93 

i,337,93i 

1,788,917 

2,497,261 

3,6i7,538 


$14,495 
28,517 
59,817 
121,560 
250,958 
402,947 

571,595 
828,911 
1,127,738 
1,468,956 
2,114,296 
2,942,257 

3,659,495 
4,442,833 
5,636,876 
6,413,283 
7,525,844 
9,084,844 
10,890,302 
11,892,767 

I3,329>644 
14,551,868 
16,139,452 
19,028,792 


Total, . . . 


$120,505,542 


$12,022,505 


$132,528,047 



292 



HISTORY OF THE PRUDENTIAL. 



It is shown by this table that while the annual premium 
income now exceeds nineteen million dollars, the aggregate 
during the past twenty-four years has been $132,528,047. The 
table is properly supplemented by one showing the aggregate 
income of the Company from all sources, including the income 
from interests, rents, etc. , which now annually exceeds one and 
a half million dollars: — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 
Total, Income. 



Years Ending 
Dec. 31ST. 


From Policy 
Holders. 


From Other 
Sources. 


Total. 


1876, 

1877, 

1878, 

1879, 

1880, 

1881, 

1882, 

1883, 

1884, 

1885, 

1886, 

1887, 

1888, 

1889, 

1890, 

1891, 

1892, 

1893 

1894, 

1895, 

1896, 

1897, 

i8y8, 

1899, 


$14,495 
28,517 
59,817 

121,560 

250,958 

402,947 

571,595 

828,911 

1,127,738 

1,468,956 

2,114,296 

2,942,257 

3,659,495 

4,442,833 

5,636,876 

6,413,283 

7,525,844 

9,084,844 

10,890,302 

11,892,767 

13,329,644 

14,551,868 

16,139,452 

19,028,792 


$48 

119 

663 

7,067 

20,964 

9,718 

12,998 

16,992 

28,842 

40,707 

50,661 

71,094 

97,589 

158,465 

184,777 

290,349 

363,034 

437,068 

567,032 

692,771 

828,802 

1,028,897 

1,342,424 

1,557,408 


$14,543 
28,636 
60,480 
128,627 
271,922 
412,665 

584,593 

845,903 

1,156,580 

1,509,663 

, 2,164,957 

3,013,351 
3,757,o84 
4,601,298 
5,821,653 
6,703,632 
7,888,878 
9,521,912 

n,457,334 
12,585,538 
14,158,446 
15,580,765 
17,481,876 
20,586,200 


Total, 


$132,528,047 


$7,808,489 


$140,336,536 



The total income from other sources than premiums during 
the twenty-four years of business operations has been, as shown, 
$7,808,489, which, added to the preceding total of $132,528,047, 
makes a grand total income from all sources, during the period 
1 876-1 899, of $140,336,536. All this has been achieved by a 



SUMMARY OF CONCLUSIONS AND RESULTS. 



293 



Company transacting a form of life insurance practically unknown 
in this country twenty-five years ago. But a still more stupendous 
result is disclosed in the aggregate of business transactions in the 
field operations of The Prudential, as indicated by the statement 
of new insurance written during each of the years forming the 
period 1 876-1 899 : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 

New Insurance Issued. 



Years Ending 


Industrial. 


Ordinary. 


Dec. 31ST. 


No. 


Amount. 


No. 


Amount. 


1876, 

1877, 

1878, 

1879, 

1880, 

1881, 

1882, 

1883, 

1884, 

1885, 

1886, 

1887, 

1888, 

1889, 

1890, 

1891, 

1892, 

1893, 

1894, 

1895, 

1896, 

1897, 

1898, 

1899, 


7,904 
IO,52I 
20,064 

35,879 
101,856 
124,746 
J 5i,956 
227,417 
266,718 

304,773 
391,278 

519,577 

558,339 

721,830 

808,597 

623,804 

804,075 

1,086,780 

1,696,847 

1,044,686 

957,8o4 

1,008,868 

1,043,998 

1,401,399 


$727,168 

967,932 

1,785,696 

3,157,352 

8,555,904 
9,688,362 
ll,54I,2IO 
20,426,140 
24,892,268 
28,860,882 
49,142,316 
60,202,194 
58,214,981 

73,576,853 
95,674,484 
72,966,176 
92,677,524 
128,208,941 
205,128,243 

124,374,407 
108,223,712 
112,371,379 
121,080,784 
165,760,248 


552 

574 

458 

1,280 

2,484 
3,827 

4,503 
5,280 
12,245 
23,503 
17,695 
29,002 
39,2o8 
54,342 


$728,500 
689,000 

632,413 
1,568,542 

3,075,376 

4,449, 1 77 
5,080,097 
6,256,198 

13,872,559 
25,706,280 

21,190,031 

31,581,798 

43,614,000 

56,914,383 


Total, . . 


13,919,716 


$1,578,205,156 194,953 


$215,358,354 



It is apparent from a study of this table that the annual 
volume of new business has been subject to very considerable 
fluctuations, but much more so in the Industrial than in the 
Ordinary business of the Company. In the former, the largest 
volume of business was written during 1894, next to which comes 



294 HISTORY OF THE PRUDENTIAL. 

the record for the year just closed, while in Ordinary business 
the largest volume of new applications was secured during 
1899. The aggregate result of a quarter-century of effort to 
' ' extend the principles of life insurance to the masses ' ' is 
summed up in the total of 13,919,716 Industrial and 194,953 
Ordinary policies written and revived during the period. If 
from this total we deduct the number of policy-holders whose 
deaths are represented in the return of claims paid, we have 
still a vastly larger number than are now in force on the books 
of the Company. The difference between the business written 
and the business at present in force, minus the mortality 
during the period, represents the lapses, the terminations, or 
the waste. But not wholly so. Large numbers who have 
lapsed had for a time the benefit of life-insurance protection, 
while all had a more or less complete opportunity to study 
and reflect upon insurance principles by the temporary protection 
and the possession of literature and contracts illustrating the 
methods and results of The Prudential. The subject has been 
touched upon in other portions of the work, and need not be 
reconsidered here in detail, except that it may be pointed out 
that the sincerity of the Company in its constant efforts to 
reduce the lapse-rate is, by inference, to be found in the fact 
that if the Company had never been compelled to lapse a policy 
it would now have on its books an amount of life insurance 
vastly in excess of what is actually the case. Instead of having 
an Industrial premium income of $15,411,254, the annual 
income would be approximately $63,000,000, and instead of 
having three and a half million of policies in force, the number 
would be approximately 12,600,000. Nor can a fair comparison 
be made with the lapse-rate prevailing in Ordinary companies, 
for it must be taken into account that the policy-holder of an 
Industrial company has fifty-two chances to lapse his policy to 
the, at most, four chances of an Ordinary policy-holder. Still, 
even when such comparisons are made they are not always to 
the disadvantage of the Industrial companies, and we have an 
excellent illustration in the experience of The Prudential, which 
during the year 1899 revived of the total new Industrial issue 
6.1 per cent, against only 4.8 per cent, of the Ordinary issue. 

Since frequent mention has been made of Industrial paid-up 
policies, it may not be out of place to state the facts briefly as to 



SUMMARY OF CONCLUSIONS AND RESULTS. 



295 



the Company's experience with this feature of business operations 
during recent years : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1890-1899. 

Paid-dp Policies. 





INDUSTRIAL POLICIES. 


Years Ending Dec. 31ST. 


Number. 


Percentage of Total 
New Issue. 


1891 

1892, 

1893, 

1894, 

1895, 

1896, 

1897, 

1898, 

1899. 


195 
175 
130 
199 
962 
1,815 
10,695 

39> 2 40 
32,629 

31,333 


O.02 
O.03 
O.02 
O.02 
O.06 
O.17 
1. 12 
3-89 
3-13 
2.24 


1890-1899, 


H7,373 


1. 12 



According to this table there have been issued during the 
past ten years 117,373 Industrial paid-up policies, which repre- 
sent an aggregate total of $4,026,900 paid-up insurance protec- 
tion. The ratio of paid-up policies to the total new issue was 
highest during 1897, and since that date there has been a marked 
decline. It would be defeating the very objects of life insurance 
if the surrender values of Industrial or, for that matter, of 
Ordinary policies were made sufficiently attractive to make such 
surrender profitable or expedient. It must needs be the aim of 
every insurance company to attain the primary object of the 
insurance contract, and entirely too much attention has been 
given to a question of far less importance than some writers, and 
especially professional agitators, have attached thereto. It has 
been the aim of The Prudential to deal equitably with unfortunate 
policy-holders, and no company has been more ready to make 
voluntary concessions and grant exceptional privileges than The 
Prudential. But the managers of the Company have never lost 
sight of the fact that persistent policy-holders are entitled to 



296 HISTORY OF THE PRUDENTIAL. 

full protection, and it would be a violation of its trusteeship of 
the interests of millions of policy-holders if, by over-liberal 
consideration of the few, the entire structure of Industrial 
insurance should be placed in peril. Hence, the fact deserv- 
ing of most serious consideration, that in life insurance, to 
accomplish the purpose of the business, the surrender or lapse of 
a policy should be at all times a partial loss to the insured, while 
its revival and persistence in premium payment should at all times 
be to the advantage of the insured.* If the companies have suc- 
ceeded in making such exceptional progress, it is largely due to 
the fact that the largest benefits and best results come to those 
who maintain the integrity of their contracts and keep their 
policies in force until death or maturity. f For, as it has been 
said with much truth, "it is the object of a life-insurance com- 
pany to pay claims," and this object is largely defeated by 
the surrender of contracts, which, if kept in force, would 
have realized much larger returns than are possible on policies 
voided by the non-payment of premiums during the life-time of 
the insured. It is, therefore, with special interest that the next 
table should be studied, as a comprehensive statement of the 



* In England the question of surrender privileges has received con- 
siderable attention, especially in connection with parliamentary investiga- 
tions into the practices and methods of Friendly Societies. In one of 
these investigations a witness called the attention of the Commission to the 
fact that the power of a member to borrow on his death certificate of 
membership was objectionable, for, he stated, "A member may never 
become entitled to funeral money. It is contrary to the principles of a 
Friendly Society, and tends to cheat the widow;" and that "Even the 
borrower thought it bad in the end." (Young's Report, p. 70.) In 
American Fraternal Societies and Assessment organizations, ostensibly 
operated for the sole benefit of the insured, there are no surrender provi- 
sions and no loan privileges, and the same holds practically true for the 
English Friendly Societies of to-day. 

f " There can be no question that the company's first duty is to those to 
whom it remains under contract obligation — its continuing policy-holders. 
It has first to consider how they are affected by a withdrawal of one of 
their number, how the sure basis of its operations, the solvency of its con- 
tracts, and the future cost of their administration stand affected. The 
elements of the problem are definite, the determination of their weight, 
the measurement of their operative force is somewhat a matter of varying 
circumstances." (Jacob L. Greene at the Milwaukee Convention of Insur- 
ance Commissioners, 1898.) 



SUMMARY OF CONCLUSIONS AND RESULTS. 



297 



direct financial results to the beneficiaries of policy-holders during 
the past twenty- four years of active business operations : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

. 1876-1899. 

TOTAI, DISBURSEMENTS TO POUCY-HOLDERS. 



Years Ending 
Dec. 31ST. 



1876, . . . 

1877, . . . 

1878, . . 

1879, • • • 

1880, . . . 

1881, . . . 

1882, . . . 

1883, . . . 

1884, . . . 

1885, . . . 

1886, . . . 

1887, . • . 

1888, . . . 

1889, . . . 

1890, . 

1891, . . . 

1892, . . . 

1893, • • • 

1894, . • • 

1895, . • - 

1896, . . . 

1897, . . . 

1898, . . . 

1899, . . . 

Total, 



Industrial. 



$1,958 

5,296 

H,338 

23,013 

57,256 

111,508 

157,706 

222,083 

322,382 

418,622 

593,273 

841,319 

1,091,723 

1,313,948 

1,725,925 
2,055,580 
2,466,406 
2,811,332 
3,H9>956 

3,655,513 
4,083,839 
4,522,932 
4,861,553 
5,426,545 



$39,901,006 



Ordinary. 



$12,595 

5,l6l 

17,375 

28,973 

49,722 

73,250 
104,876 
117,239 
259,978 
322,678 
463,844 
527,850 
830,100 



$2,813,641 



Total. 



$1,958 

5,296 

H,338 

23,013 

57,256 

111,508 

157,706 

222,083 

322,382 

418,622 

593, 2 73 

853,914 

1,096,884 

1,331,323 
1,754,898 
2,105,302 
2,539,656 
2,916,208 

3,237,195 
3,915,491 
4,406,517 

4,986,776 
5,389,403 
6,256,645 



[2, 714,647 



It will be observed that, in the aggregate, there has been 
returned to the Prudential policy-holders and their beneficiaries 
the vast sum of $42,714,647. The annual disbursements on In- 
dustrial business have now reached almost five and a half million 
dollars, to which must be added $830, 100 of returns to Ordinary 
policy-holders, or a total of payments to beneficiaries during 1899 
of $6,256,645, being equal to an average weekly payment of over 
$1 20,000. How much suffering and want this vast sum mitigates, 
and partly, at least, prevents by timely assistance, no words can 
adequately describe. Only those who have an intimate knowledge 



298 



HISTORY OF THE PRUDENTIAL. 



of the life and struggle of the industrial population can even 
faintly understand the deeper meaning of these figures, figures 
which indicate only in small part the vast amount of good accom- 
plished through the medium and by the method of Industrial 
life insurance. But it would, indeed, be a grave error to look 
upon the results attained in the payment of claims as the sole test 
of the efficiency and beneficence of this system of insurance. The 
far more important point is to remember that there remains in 
force more than $389,000,000 of insurance protection on the lives 
of Industrial policy-holders, every dollar of which is fully secured 
by an adequate reserve safely invested in the very best kind of 
securities, fully warranting the claim that ' ' The Prudential has 
the strength of Gibraltar. ' ' The finances of the Company, the 
assets and surplus to policy-holders, and the liabilities, determined 
by the most careful methods of actuarial valuation as applied to 
Ordinary life insurance, are fully set forth in the table which 
follows : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1876-1899. 



Years Ending 
December 31ST. 



1876, 

i877> 
1878, 
1879, 
1880, 
188 1, 
1882, 
1883, 
1884, 
1885, 
1886, 
1887, 
1888, 
1889, 
1890, 
1891, 
1892, 

1893. 
1894, 

1895, 
1896, 

1897, 
1898, 
1899, 



Assets. 



$2,232 
7,371 

21,391 
I39, 8o 3 
168,154 

253,853 
392,269 

563,178 

752,878 

1,040,816 

1,425,720 

1,967,369 
2,874,163 

3,924,295 

5,084,895 

6,889,674 

8,840,853 

11,021,445 

13,041,810 

15,780,154 

19,541,828 

23,984,570 

28,887,196 

33,948,76o 



INABILITIES. 

(4 50 



$256 

7,034 

30,265 

71,170 

138,067 

227,233 

387,521 

423,438 

635,827 

1,019,617 

1,480,291 

2,097,944 

2,853,230 

3,741,021 

5,440,617 

6,622,411 

8,285,884 

10,100,033 

12,470,317 

I5,507,7H 
18,744,452 
22,998,301 
27,934,337 



Surplus. 
(4*) 



$2,232 
7,115 

14,357 
109,538 

96,984 
115,786 
165,036 

175,657 
329,440 

404,989 
406,103 

487,078 
776,219 
1,071,065 
1,343,874 
1,449,057 
2,218,442 

2,735,561 
2,941,777 
3,309,837 
4,034,117 
5,240,118 

5,888,895 
6,014,423 



SUMMARY OF CONCLUSIONS AND RESULTS. 299 

There is abundant evidence in this table of inherent strength 
and permanent financial stability. Year by year material im- 
provement has been made in the accumulation of substantial 
assets and of a sufficient surplus, until to-day this margin of safety 
exceeds six million dollars. As to the investment of the vast 
accumulation of assets, accumulated and held as a sacred fund for 
the discharge of maturing obligations, it may be of interest to 
the reader to know that, of the sum of over thirty-three million 
dollars (three times the amount of accumulations of only seven 
years ago), 72.4 per cent, is invested in bonds and mortgages 
(including railroad and municipal bonds), 13.9 per cent, is in- 
vested in real estate, 8.3 per cent, consists of cash in bank, 3.0 
per cent, is represented by premiums in course of collection, 
1.4 per cent, by loans on policies and collateral securities, while 
1.0 per cent, represents accrued interest and rents. Of the 
liabilities of the Company, 81.8 per cent, represent the reserve 
to the credit and for the security ' of policy-holders ; 17.7 per 
cent, represent the surplus, including capital ; and 0.5 per 
cent, represent other liabilities not included in the two preceding 
items. 

Too much stress cannot be laid on the absolute financial secu- 
rity to millions of policy-holders represented by these figures 
and facts dealing with the finances of the Company. The whole 
history of so-called co-operative and assessment insurance is one 
long record of failure and of fraud, representing untold millions 
of wasted money and untold millions of unpaid claims, but most 
of all a record of the shameful betrayal of a sacred trust. It is 
something very considerably to the credit of the managers of 
Industrial insurance companies that failure and insolvency have 
been made impossible by the safe and substantial foundations on 
which the structure of Industrial insurance rests, and which, as 
far as human judgment goes, will endure as long as the Republic 
itself. 

Where so large a number of business transactions are 
required, affecting so considerable a number of people as are 
represented in the policy-holders of The Prudential, it will be of 
interest to place on record the actual number of employees of the 
Company on February 1, 1900, together with the corresponding 
data for the year 1885, for which the information has been given 
in an earlier portion of this work : — 



30o 



HISTORY OF THE PRUDENTIAL. 



OFFICE AND AGENCY FORCE OF 
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 

1885 AND I9OO. 



Force. 


1885 


1900 


Assistant Superintendents of Districts, .... 
Inspectors of Districts, . 


125 

34 

150 

1,200 


811 

203 

1,640 

34 
7,802 


Total Office and Field Force, 


1,509 


10,490 



To the total force for the present year must properly be 
added a field medical staff of 3,884 examining physicians, and 
further 45 employees in the printing department and 46 em- 
ployees in the home-office building as janitors, elevator attend- 
ants, etc. The increase in the total office and field force during 
the period 1 885-1900 has been 595 per cent., while during the same 
time the business operations of the Company, as measured by 
the amount of Industrial insurance in force (not taking into 
account the Ordinary business), have increased 863 per cent., — 
in other words, the large increase in employees has been made 
necessary by the still larger increase in business operations. The 
increase is perhaps best illustrated by the average weekly issue 
of new policies, as shown in the following table for the three 
years, 1879, 1889 and 1899 : — 

AVERAGE NUMBER OF NEW POLICIES ISSUED WEEKLY BY 
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 





1879, I 889, 1899. 






Years Ending Dec. 31ST. 


Industrial. 


Ordinary. 




Weekly Issue. 


Weekly Issue. 

> 


1879, 
1889, 

1899, 




690 
13.881 
26,950 






25 
1,044 





SUMMARY OF CONCLUSIONS AND RESULTS. 301 

The actual extent of business operations will be more clearly 
realized in this statement of weekly office transactions reaching 
now an average issue of more than 28,000 new policies, and 
weekly claim payments exceeding $120,000. 

A very interesting and suggestive illustration of the develop- 
ment and highly complex nature of the business of Industrial 
insurance is supplied by the statistics of the Printing and Supply 
Departments of The Prudential. According to the returns for 
the year 1899, these two departments employ more than sixty 
persons, while nine presses are kept continually at work to meet 
the demands of the office and field force for the large number of 
forms and different kinds of supplies required. During 1899 
there were shipped daily by express, or otherwise, three and one- 
half tons of matter — pamphlets, paper, forms, letter-heads, etc. 
A large amount of the necessary printing includes the issue of 
two regular publications : ' ' The Prudential, ' ' for distribution to 
the Industrial policy-holders, and ''The Weekly Record," for 
distribution to the field force. ' ' The Prudential ' ' is issued every 
other month, the edition never being less than two million copies. 
This paper contains much useful information on the subject of 
Industrial insurance, rate tables, health notes for the home, and 
a list of current claim payments. " The Weekly Record " is for 
the field force, and contains, in addition to useful information on 
the subject of life insurance, a record of the results obtained from 
week to week by the principal Superintendents, Assistants and 
Agents of the Company's field force. " The Weekly Record" 
has proven a most useful element in the development of an esprit 
de corps and acts directly as an incentive and an encouragement 
to increased efforts on the part of those who are making a deter- 
mined struggle for individual success and leadership as Industrial 
life underwriters. 

So much having been said as regards extent of operations, 
some information as to the class of people insured on the 
Industrial plan with The Prudential Insurance Company may be 
of interest. This question can be answered in a number of ways, 
but I confine myself to data relating to the nationality and occupa- 
tion of the insured. First, as regards race and nationality, it will 
be recalled that it is not now the practice of the Company to solicit 
negro risks, on account of adverse legislation compelling Industrial 
companies to grant the same benefits to persons of color as are 



302 



HISTORY OF THE PRUDENTIAL. 



paid to whites, in contrast to the recognized fact that the for- 
mer are subject to a death-rate about 50 per cent, higher than 
the latter. Hence the proportion of colored persons is smaller 
than would be the case were the former and more equitable prac- 
tice still in vogue. Of the total number of decedents in the 
Industrial experience of The Prudential during the period 1891- 
1898, only 2.5 per cent, were persons of color. 

Nationality of Decedents Insured under Industrial Policies in 
The Prudential Insurance Company of America. 

1898. 



Nationality of Decedents. 



Per Cent, of Total 
Mortality. 



Native-Born, 

Born in the United Kingdom, 

" Germany, 

" Canada, 

" Austria-Hungary, 

" Scandinavia, 

" Switzerland, 

1 ' Russia, Poland and Finland, 

" Italy, 

" France, 

" Holland and Belgium, 

" South America, Mexico and West Indies, 

" Spain, Portugal and Azores, ...... 

" Asia, Africa and Turkey, 



62.18 
22.07 
12.01 
0.94 
0.74 
0.65 
0.29 
0.29 
0.27 
0.26 
0.20 
0.04 
0.03 
0.03 



It is shown in this interesting tabulation, as far as I know, 
the first of its kind relating to Industrial insurance, that of all 
the deaths during the year 1898, 62.2 per cent, were of persons of 
native birth. Unfortunately, no data are at the command of the 
Company as to the parentage of the insured, this question not 
being asked in the application, but the fact is, nevertheless, signifi- 
cant that the larger proportion of the insured in The Prudential 
are native-born. Next in numerical importance to those of native 
birth come persons born in the United Kingdom, but of the latter 
the majority are Irish, who, as is well known, form a very large 
proportion of the population of the United States. Natives of 
Germany form 12.0 per cent, of the total insured, while the re- 
mainder is made up of practically every nationality forming the 



SUMMARY OF CONCLUSIONS AND RESULTS. 303 

heterogeneous population of this country.* The fact that so large 
a proportion of Germans should be insured is of considerable 
interest, since it is generally conceded that this element of our 
population is not only of a most thrifty and saving disposition, but 
also at the same time the most cautious and prudent in making 
life-insurance provision on plans not likely to lead to disappoint- 
ment and litigation. It may not be out of place to add, by way 
of comment, that during recent years Industrial insurance on the 
plan of The Prudential has made very material progress in Ger- 
many, in spite of the fact that compulsory government insurance 
is supposed to meet all of the needs of the working population, 
and with German thoroughness a hand-book on ' ' Die Kleine 
I^ebens-Versicherung ' ' has recently been published as a guide for 
prospective insurers. 

The facts pertaining to the nationality of the insured popula- 
tion are, therefore, confirmatory evidence that the class of people 
insured with Industrial companies represents a normal proportion 
of natives and foreigners, and that it is an error to suppose that 
the demand for this form of insurance is largely limited to the 
foreign-born or to a distinct element of the emigrant population. 
While we have no absolute test as to the moral or mental char- 
acteristics of these people, we at least have the proof that no 
special selection of a distinct class or element of the population 
exists, and that, in view of the large proportion of native-born 
policy-holders, the system of Industrial insurance must properly 
be looked upon as national in its scope and operations. 

A still more satisfactory test as to the character of the class 
of risks accepted by The Prudential is supplied by a detailed state- 
ment of the principal occupations of the insured, and for this 

* During 1899 The Prudential Insurance Company paid Industrial claims 
in the following countries : — 

Australia, Austria, Azores, Belgium, Canada, China, Denmark, England, 
Germany, India, Ireland, Italy, Norway, Russia, Scotland, South Africa, 
Sweden and Switzerland. 

Since the Company does not transact business outside of the United 
States, all of the claims paid in foreign countries represent policies origi- 
nally taken out in the United States, but continued in force after the return 
of emigrant policy-holders to their native land. 

This list does not include claims paid in Cuba, Puerto Rico, the Phil- 
ippines and the Sandwich Islands, or on sailors and soldiers in the service of 
the United States. 



3°4 



HISTORY OF THE PRUDENTIAL. 



purpose I have taken account of , the occupation of those who 
died during the two years 1897 an( i 1898 : — 

THE PRUDENTIAL INSURANCE COMPANY OP AMERICA. 
Principal Occupations of White Mai.es. 



Industrial Mortality Experience, 1897-1898. 
Total Number of Male Decedents (aged 15 and over); 24,237. 



No. 

Letter Carriers, 27 

Policemen, 71 

Soldiers, 139 

Actors, 18 

Lawyers, Judges, etc., ... 23 

Clergymen, 13 

Musicians, 51 

Photographers 19 

Physicians, 17 

Teachers, 19 

Veterinary Surgeons, ... 11 

Barbers, 189 

Hotel-keepers, 93 

Sextons, 14 

Watchmen, 267 

Drivers, Truckmen, .... 951 

Elevator Men, 17 

Railway Employees, .... '489 

Telegraphers, 30 

Boatmen, 64 

Longshoremen, 68 

Pilots, 10 

Sailors, 72 

Captains, 30 

Bakers, Confectioners, ... 211 

Druggists, 145 

Grocers, 206 

Hardware Dealers, 116 

Liquor Dealers, 197 

Bartenders, 211 

Merchants, Dealers, .... 260 

Millers, 37 

Salesmen, 197 

Undertakers, 43 

Agents, 174 

Book-keepers, 156 

Brokers, n 

Clerks, 665 

Stenographers, 11 



No. 

Tobacco Workers, 238 

Electrical Workers, .... 273 

Gas Workers, 117 

Glass Workers, 123 

Jewelers, 166 

Gold and Silver Workers, . . 171 

Brass Workers, 71 

Copper Workers, 11 

Blacksmiths, 401 

Iron Workers, 715 

Tin Workers, 145 

Shoemakers, 558 

Tanners, , . . 65 

Machinists, 460 

Paper Workers, 40 

Printers, Compositors, . . . 223 

Lithographers, 27 

Rubber Workers, 20 

Hatters, 133 

Tailors, 350 

Carpet Workers, 30 

Silk Workers, 73 

Ropemakers, 21 

Spinners and Weavers, . . . 144 

Coopers, 171 

Carpenters, Cabinetmakers, 1,002 

Contractors, 53 

Masons, 401 

Brickmakers, 33 

Marble Workers, 32 

Plumbers, 201 

Potters, 53 

Stone-cutters, 122 

Painters, 550 

Roofers, 48 

Riggers, 18 

Farmers, 704 

Gardeners, 209 

Fishermen, 57 

Miners, 442 

Quarrymen, 29 

Engineers, Firemen, .... 364 



SUMMARY OF CONCLUSIONS AND RESULTS. 



305 



The white adult male decedents in The Prudential's Indus- 
trial experience of 1897 an( ^ 1898 ma J be grouped, according to 
occupation, as follows : — 



Occupations. 



Trades, Industries and Manufactures, 

Laborers, 

Merchants and Dealers, 

Building and Construction, . . . 
Transportation and Communication, 
Agriculture, Mining, Fisheries, . . 

Personal Service, • . . . 

Professional Service, 

Government and Defense, 

No Occupation and Unstated, . . . 

Total, 





Pbr Cent, of 


No. 






Total. 


5,872 


24.2 


4,944 


20.4 


3,33i 


13-7 


2,979 


12.3 


2,036 


8.4 


1,704 


7.0 


i,449 


6.0 


456 


1.9 


314 


1-3 


1,152 


4.8 


24,237 


IOO. 



These tables bring out very clearly the truly industrial 
character of the business, and, had space permitted, a more 
detailed list of occupations would have shown that practically 
every profession, trade and industry is represented among the 
policy-holders in about the same proportion as in the general 
population according to the United States census of 1890. It is 
shown that among the insured are clergymen, lawyers, justices, 
physicians, teachers, soldiers, sailors, firemen and policemen ; 
every form of social life finds its representation, though, as a 
matter of course, the larger proportion of the insured are laborers, 
skilled and unskilled, employed in the numerous industries and 
trades. It is a matter of regret that it is not possible to give 
the exact number of persons insured in the various occupations) 
but a statistical investigation of the occupation of the living 
would hardly be productive of sufficiently important practical 
results to warrant the necessary expenditure of money and time 
for tabulation and analysis, dealing, as The Prudential does, 
with millions of policy-holders ; but the mortality returns here 
given will be sufficient to indicate the truly industrial nature of 
the business. Estimates of the probable number insured, based 
on the number of deaths during two years, have been made by the 
writer, but so many factors have to be taken into consideration that 
the results can be only approximately correct. Still, as regards the 
most important occupations it may be of interest to the reader to 



306 HISTORY OF THE PRUDENTIAL. 

learn that, on the basis of the best available data, The Prudential 
in 1898 had approximately 113,100 laborers, 27,343 teamsters 
and drivers, 30,700 carpenters, 20,300 iron and steel workers, 
18,000 farmers, 34,700 clerks, 14,600 shoemakers, 18,200 printers, 
24,100 railway employees, 17,900 miners and 16,000 machinists 
insured on the Industrial plan of life insurance. 

As to the occupations of women, I have also been compelled 
to limit my table to a small number of interesting employments 
and pursuits. The proportion of the sexes of the insured is, in 
the Industrial experience of The Prudential, about the same 
as in the general population,* and, as must necessarily be the 
case, a large majority of insured women are housekeepers. For 
the remainder I give a table illustrating the truly industrial and 
national character of the business of the Company : — 

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 
Principal Occupations of Females. 



Industrial Mortality Experience, 1897-1898. 

Total Number Adult (aged 15 and over) White Female 
Decedents, 23,837. 



Actresses 8 Cashiers, n 

Artists, 5 Clerks, 101 

Musicians, 15 Stenographers, 23 



Nurses, 96 

Teachers, 43 

Telegraph and Telephone 

Operators 6 

Saleswomen, 63 

Store-keepers, 34 

Book-keepers, 33 



Book-binders, 34 

Boxtnakers, 21 

Carpet Weavers, 15 

Corsetmakers, 13 

Dressmakers, Seamstresses, . 414 

Milliners, 56 

Silk Workers, 54 



This table does not require further comment, but has been 
included in the series as a rather interesting contribution to our 
knowledge of woman's share in life-insurance development. 
While in Industrial insurance it is the practice to place a small 
polic}' on every member of the family rather than a large policy 
upon a single member, women, as a matter of course, have been 

* Of the total number of decedents in the Industrial experience of The 
Prudential during the period 1891-1898, 51.2 per cent, were males and 48.8 
per cent, were females. According to the United States census of 1890, 
"Vital and Social Statistics," Part III., the sex distribution of the total mor- 
tality in the United States was 52.2 per cent, males and 47.8 per cent, females. 



SUMMARY OF CONCLUSIONS AND RESULTS. 307 

insured in about the same ratio as men, but the good effect of life 
insurance in early life is illustrated in the increasing number of 
self-supporting young women, who continue in force the insur- 
ance placed upon their lives in early infancy by parents whose 
memory must needs be held in higher esteem for this evidence of 
prudent forethought and affectionate regard. 

These facts pertaining to the nationality and occupations of 
the insured will make it plain that the business is one which is ap- 
plicable to all sorts and conditions of men, and that it is truly 
national and industrial in its scope and extent of operations. 
Perhaps the best proof of this assertion is to be found in the fact 
that, in the city in which The Prudential was founded, in 1875, 
the large majority of the population are now insured on this plan 
of family insurance. In Newark, N. J., during the year 1899 
there occurred, according to the Board of Health, 3,548 deaths of 
persons one year of age and over. Of this number 1,307, or 
36.8 per cent., were insured in The Prudential, while in the other 
Industrial companies, as far as my information goes, about an 
equal number of policies were in force, indicating a total of about 
73 per cent, of the population above age one insured on the 
Industrial plan. If we exclude the lowest pauper class and the 
well-to-do or rich, who are above the need of Industrial insur- 
ance, it will be seen that in this city, to-day one of the leading 
manufacturing cities of this country, but a very small proportion 
of the working people have not as yet availed' themselves of this 
form of insurance as a means of providing against some of the 
uncertainties of human life. 

As to the direct effect of this form of insurance on the dimi- 
nution of the rate of pauper burials, once exceedingly high in 
the city of Newark,, we find evidence in the official returns, for, 
taking account of the last twenty years, there has been a very 
material reduction in the rate of burials at public expense. In 
1880, when The Prudential had only 49,959 Industrial policies 
in force in the State of New Jersey, the rate of pauper burials 
in the city of Newark per 100,000 of population was 128, while 
in 1899, with 36.8 per cent, of the population over one year of 
age insured in The Prudential, the rate was only 93. It will 
be apparent that in this direction alone the Industrial companies 
save a not inconsiderable amount to the taxpayer and the com- 
munity. 



3 o8 



HISTORY OF THE PRUDENTIAL. 



Pauper burials statistics for a number of American cities for 
a period of considerable length are, unfortunately, not obtain- 
able ; but I have brought together the returns for ten principal 
cities, which have been consolidated in the following table. The 
results are for five-year periods for the twenty years 1880-99, 
and include the cities of New York, Boston, Newark, Cincinnati, 
Baltimore, Indianapolis, Minneapolis, Cambridge, Worcester 
and Charleston, S. C. The table indicates a constant, though 
gradual, decline in the rate of pauper burials from 210 per 
100,000 during i88o-'84 to 156 during 1 895-' 99 : — 

PAUPER BURIALS 
In Ten American Cities, 1880-1899. 



Periods. 


Aggregate Popula- 
tion of Ten Cities. 


Aggregate Number 
of Burials. 


Rate per 100,000. 


i88o-'84, 

i88 5 -'8 9 , 

i890-'94, 

i895-'99,f 


13,345,248 

15,397,545 
17,623,685 
20,854,451 


27,987 
29,747 
33,l8o 
32,614 


2IO 

193 
188 

156 



Since by means of Industrial insurance frequent provision is 
made for dependent widows and orphans, we should also expect 
a decrease in the cost of out-door relief, in spite of the fact that 
' ' this is an age of free if foolish giving. ' ' In Newark during 
1880 the cost of out-door poor relief was $29,818, or $0.22 per 
capita, against a cost of only $17,158 during 1898, or of $0.07 
per capita. Had the rate of 1880 prevailed in 1898, the actual 
cost to the taxpayers would have been $52,607. 

A not inconsiderable share of this reduction must be credited 
to the Industrial companies, which through their large claim dis- 
bursements, now exceeding $16,000,000 annually, are the direct 
cause of a vast diminution of pauperism and w T ant.* Indirectly 
the effect of the system is to be traced in the increased habits of 



* A typical instance of the direct relation of Industrial insurance to 
public welfare is furnished by a case referred to in the Orange (N. J.) 
Journal of December 2, 1899, in which reference is made to the death of 
a Mrs. Ellen Clark, who, on account of illness, had for more than two 3-ears 
been under the care of the poor authorities and the management of the 
Memorial Hospital. The item concludes with the statement that " the 
expenses of her funeral were met by an insurance policy which had been 
kept in force by a charitable woman." 



SUMMARY OF CONCLUSIONS AND RESULTS. 309 

savings and thrift in other directions, but especially in the growth 
and development of savings banks and building and loan associa- 
tions. In the State of New Jersey there were 73,052 depositors 
in savings banks in 1880, while the number of Industrial policy- 
holders was only 49,959, while in 1899 the number of depositors 
had increased to 190,941, against an increase to 613,552 of Indus- 
trial policy-holders in The Prudential. It will be recalled that 
in 1872, before the organization of Industrial companies, the 
Labor Commissioner of Massachusetts had pointed out that sys- 
tematic savings among working people were the exception rather 
than the rule, while now it may be said that systematic savings 
habits are the rule * either in the direction of deposits in banks 
or payments to building and loan associations, and this result 
must be largely attributed to the missionary work of Industrial 
companies, like The Prudential, teaching the masses habits of 
thrift not only in one, but in many directions. 

I can only very briefly touch upon the medical statistics of 
the Company. Naturally in a branch of life insurance so radically 
different in its methods and extent of operations from Ordinary 
life companies, the mortality experience, the disease and accident 
occurrence must widely differ from the observed experience of 
companies limiting their risks to adult males of the more pros- 
perous elements of the population, and as regards medical exam- 
inations in Industrial insurance they are, as a matter of course, 
less rigid than is the case in Ordinary life insurance. This is 
shown by the ratio of rejections of examined Industrial business 
(Prudential experience 1899) , which was only 1.5 per cent, against 
a ratio of 15.5 per cent, in Ordinary. 

In other words, among the Industrial class of risks practi- 
cally all applicants are accepted, and naturally a higher mortality 



* It is much to be regretted that it is impossible to furnish information 
as to the average number of deposits per annum made by depositors in 
American savings banks at the present time. In reply to an inquiry 
addressed to the Board of Commissioners of Savings Banks of Massa- 
chusetts, I am informed that the investigation made in Massachusetts in 
1872 was the only instance in which the information has ever been given. 
The considerable growth of Dime Savings Banks and Penny Provident 
Funds during the past twenty-five years would, however, give direct sup- 
port to the assertion that Industrial insurance has been directly, as well as 
indirectly, a force making for the education of the masses in habits of sys- 
tematic saving of small sums {ante, p. 25). 



3io 



HISTORY OF THE PRUDENTIAL. 



experience must result. Dangerous and unhealthy occupations 
are not discriminated against, as is evidenced by the table of occu- 
pations showing the large proportion of men employed in mines, 
the railway service, at sea, and in other dangerous occupations. 
These occupations are subject to a higher mortality, which finds 
its corresponding result in higher premium rates. The table 
which follows has been limited to thirty principal causes of death 
observed in the Industrial experience 1891-1898, and is only 
intended as evidence confirming facts previously stated : — 

INDUSTRIAL MORTALITY EXPERIENCE OF THE PRUDENTIAL 

INSURANCE COMPANY. 
Thirty Principal Causes of Death. 1891-1898. 





Per Cent, of 


Number. 


Total 




Mortality. 


36,107 


16.63 


25,851 


II.90 


16,881 


7-77 


13,438 


6.19 


10,343 


4.76 


9.403 


4-33 


9,228 


4-25 


7,348 


3-38 


7,OH 


3-23 


5,971 


2-75 


5,526 


2-55 


4,837 


2.23 


4,559 


2.10 


4,035 


1.86 


4,012 


1.85 


3,821 


1.76 


2,711 


1.25 


2,33i 


1.07 


2,253 


1.04 


2,234 


1.03 


2,062 


o.95 


i,734 


0.80 


1,721 


0.79 


1,632 


o.75 


i,395 


0.64 


1,274 


o.59 


1,160 


o.53 


1,104 


0.51 


1,084 


0.50 


1,034 


0.48 


25,058 


n-53 


217,158 


100.00 



Tubercular Diseases, . . 

Pneumonia, 

Heart Diseases 

Bright 's Disease, . . . . 

Accidents, 

Diphtheria, 

Apoplexy, 

Cancer, 

Bronchitis, 

Gastritis, 

Meningitis, 

Typhoid Fever, 

Croup and Laryngitis, . 

Paralysis, 

Diseases of the Liver, . 
Diarrhoea and Dysentery, 

Scarlet Fever, 

Peritonitis, 

Diseases of Women, . . 

La Grippe, 

Old Age, 

Convulsions, 

Cholera Infantum, . . . 
Suicide and Homicide, . 

Rheumatism, 

Asthma, 

Malarial Fever, 

Dropsy, 

Insanity, 

Pyaemia and Septicaemia, 
All other causes, . . . . 

Total, 



SUMMARY OF CONCLUSIONS AND RESULTS. 



3" 



The most important cause of death in the Industrial mor- 
tality experience of The Prudential is shown to have been con- 
sumption and other tubercular diseases, forming 16.6 per cent, 
of the total mortality from all causes. Next to tubercular diseases 
we note an excessive mortality from pneumonia, responsible for 
1 1.9 per cent, of the total deaths. The proportion of deaths 
from heart diseases and Bright' s disease was 7.8 per cent, and 
6.2 percent., respectively, while accidents were responsible for 
4.8 per cent, of the mortality from all causes. In comparing this 
mortality experience with the mortality of the general popula- 
tion, the fact must not be lost sight of that, it being the practice 
of the Company to accept risks on all healthy lives one year of 
age and upwards to the year seventy, deaths under the age of 
one are not represented in the mortality experience of the Com- 
pany. The age distribution of the mortality is, however, fully 
disclosed in the next table, showing the actual and relative 
numbers of deaths at various groups of age : — 

INDUSTRIAL MORTALITY EXPERIENCE. 1891-1898. 
Whits Maizes and Females. 

Proportion of Deaths at Various Ages in ioo Deaths at All Ages. 



Ages at Death. 


1 
Males. Females. 




13.6 

6.6 
2-5 
3-7 
5-6 
6.7 
7.0 
6.8 
6.3 
6.3 
7-i 
7.2 
7.8 
6.9 
5-9 


13-3 
6.7 
2.7 


«;— q 


IO— 14 


ICJ-IQ 


■?■ / 
3-9 
5-8 
6.4 
5-8 
5-i 
5-2 
5-6 
7.0 
7.8 
8.8 


20—24. . 


25— 2Q 


30—34 


35-3Q, . . 


40—44 


45-4Q, 


SO— 54 


«-;q 




6^-60 


8.2 




• 7-7 



The large proportion of deaths at the age period 2-4 (both 
years inclusive) is, of course, explained by the fact that Indus- 
trial insurance being family insurance, children of ages over one 



312 



HISTORY OF THE PRUDENTIAL. 



form a very large proportion of the insured, but not more so than 
in the general population, as is made clear by comparative data 
for the city of New York, where, during the period 1891-1896, 
the proportion of deaths, ages 2-14 (both years inclusive), was 
26.9 per cent., against 23.4 per cent, for The Prudential. 
A table has been given on page 218 showing the actual 
mortality experience per 1,000 living, for children under ten 
years of age, to which has been added the expected mortality 
according to the Farr life table, on which the premiums of the 
Company are calculated. It was there shown, and we have here 
additional proof, that in the practice of insuring children for 
small sums no unfavorable factors have been observed in the 
experience of the Company. 

The quarter-century results of experience in business man- 
agement are, perhaps, nowhere better brought out than in the 
vastly improved policy conditions of the Industrial contract, 
to-day practically identical in all essentials with the contract of 
Ordinary policy-holders. Briefly stated, the results of years of 
effort, of a strong sense of equity, prudence and liberality, are 
shown in the following statement of the Industrial policy con- 
ditions in 1876 and 1900 : — 

EVOLUTION OF THE INDUSTRIAL POLICY OF 
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA. 



Policy Conditions. 



Amounts of Insiirance, Age io, Premium 5c. 

Benefit during first 3 months, 

Death from Consumption during 1st year, 

" Heart Diseases " 

" Suicide, 

" " Intemperance, 

Hazardous Occupations, 

Residence, 

Incontestability, 

Paid-up Insurance, 

Additional Benefits, 

Cash Dividends, 

Cash-Surrender Values, 



T876 



$100.00. 

No liability. 

< < 

< < 


$120.00. 

One-fourth. 

Full liability. 
< < 


Voids policy. 


« < 
< < 


Very restricted. 
Restricted. 
No provision. 
None. 


No restriction. 

t < 

After 2 years. 

" 3 " 

<< - < < 


< < 


" 15 " 

" 20 " 



1900 



The great value of these concessions and the removal of 
many burdensome restrictions cannot be adequately estimated 
in dollars and cents. Still, as an indication of the financial 



SUMMARY OF CONCLUSIONS AND RESULTS. 



3 J 3 



importance of the many measures introduced during the past 
twenty years, it is but proper that I should insert a brief, even 
though incomplete, statement as to the cost of the numerous 
concessions made voluntarily by The Prudential to its policy- 
holders : — 

Concessions made by The Prudential Insurance Company of 
America to its Industrial Policy-Holders, and the Esti- 
mated Cost of same to January i, 1900. 



Concessions. 



Cost. 



Making retroactive the increase in benefits in 1886, and in 
Infantile benefits in 1896, ... 

Granting Paid-up insurance since November, 1893, on poli- 
cies five years old, containing no agreement for same, . 

Granting Paid-up insurance from July 1, 1898, on policies 
three and four years old, containing agreement for 
Paid-up insurance after five years, 

Dividends declared since January, 1897, on policies con- 
taining no provisions for dividends, 

Allowing new policies to be written in full immediate 
benefit if original policies are lapsed, 

Allowing policies that have been lapsed to be revived 
without the payment of arrears in premiums, such ar- 
rears being a non-interest bearing lien on the policies, 



$530,000 
1,040,000 

20,000 

563,894 
27,000 

(Not estimated. ) 



Total estimated value of concessions, $2,180,894 



Only the more important concessions are referred to in this 
table. Minor concessions, such as the rule under which the first 
two weeks' premiums are returned on request if policy is not 
satisfactory, the removal of the consumption and suicide clauses, 
the lien clause under which lapsed policies can be revived with- 
out the payment of arrears, the lien bearing no interest, and 
many others referred to in other parts of this work, cannot be 
conveniently calculated, but as the matter stands it is shown 
that the Company, during fourteen years, has made concessions 
to policy-holders, whose original contracts did not provide for 
privileges offered new insurers, to the extent of $2,180,894. I n 
other words, the Company never advanced a step, never made 
a distinct improvement in its policy contract, but it made such 
privileges and improvements retroactive to all policy-holders, 



314 HISTORY OF THE PRUDENTIAL. 

irrespective of the fact that under the original contracts policy* 
holders would not have been entitled to increased benefits in one 
direction or another. Does not this account for the fact that 
The Prudential holds so high a place in public esteem? Is it 
not clear, in the light of these facts, known to millions of our 
most intelligent working people, that The Prudential has been 
just, has been liberal, has been fair in its dealing with the masses, 
in marked contrast to the shameful betrayal of their interests in 
the past by thousands of concerns of whatever name, trading 
under the title of insurance organizations, largely, if not solely, 
for the purpose of personal profit? Of all the beneficiaries to 
whom claims were paid by The Prudential during 1899 , approxi- 
mately 50 per cent, received more than their original contract called 
for. Can any Ordinary, any Assessment, any Fraternal Insur- 
ance Company or Society point to a similar record of prudence, 
equity and liberality? Where so much has been done, there 
need be no doubt but that still further and still greater advance- 
ment will be made, but The Prudential will ever remain loyal 
to its early principles, will take no steps which are not based on 
its own experience, supported by observed facts. 

These summaries and brief restatements of facts previously 
touched upon cannot fall very short of making clear the vast 
extent in operations and far-reaching economic and social con- 
sequences of this form of life insurance in the United States. 
They will make clear that the business is the result of evolution- 
ary forces making for ages for an improved system of protection 
against the most immediate and socially important wants of the 
masses ; they will have shown that Industrial insurance rests on 
a firm foundation, and that it enjoys the highest possible confi- 
dence and appreciation on the part of millions of our country's 
best and most respected class of industrial workers ; that it in- 
cludes the heroes of peace as well as of war ; that it ministers to 
the wants of the young, the middle aged and the old ; that it is 
national in its scope and extent, and that it has therefore a place 
in the social and political economy of the nation, well deserving 
of the most serious consideration of the statesman, the economist, 
and the social reformer. It has been shown that, from the stand- 
point of public policy, this system is worthy of State approval on 
the ground of a decrease in public burdens and the diminished 
need of private charity and aid, and in the corresponding increase 



SUMMARY OF CONCLUSIONS AND RESULTS. 315 

in the savings habits of the people and the longer life which must 
result from improved conditions of social life. 

Most of all is Industrial insurance deserving of public 
respect and consideration in a Republic where the will of the 
majority is law, where the wishes of the masses are respected, 
where measures and tendencies meeting with extensive public ap- 
proval are looked upon as evidences of progress in the direction of 
a higher and better life. The verdict of the masses, of the best ele- 
ments of our industrial population, is certainly in favor of this form 
of insurance. However humble this struggle on the part of the 
working people to improve the conditions of their social and family 
life, the results, in the aggregate, are of almost stupendous propor- 
tion ; and who will sa}^ that it is not true in this particular, as it 
has been pointed out by Mr. L,ecky to be true in general, that ( ' It 
i s * * * * Industrialism that has brought into the world 
that strong sense of the moral value of thrift, steady industry, 
punctuality in observing engagements, constant forethought with 
a view of providing for the co?iti?igencies of the future, which is 
now so characteristic of the moral type of the most civilized 
nations."* 

Limited in space and time, I have, no doubt, fallen short in 
my aim to produce a work useful to the student of economics 
and social problems, a work which, while in a measure the 
history and record of events relating to The Prudential Insur- 
ance Company of America, is yet largely the history and 
record of events relating to the business as a whole. While I 
cannot have answered all of the many questions relating to the 
business which have in times past assumed more or less public 
importance, still, every effort has been made to meet reasonable 
expectation by a full and detailed treatment of the most important 
points of controversy. If it is said that a statement of the facts 
coming from one actively employed in the business of Industrial 
insurance must needs fall short of the highest requirements of 
critical examination, the answer is that the writer has kept in 
mind the well-known expression of Th. Ribot, that "It is a 
complete mistake to. suppose that what is not true can be scien- 
tifically established,"! and with these words of proper caution I 

* The Map of Life, p. 53. 

t Heredity, p. 183. Appleton & Co., N. Y., 1891. 



316 HISTORY OF THE PRUDENTIAL. 

have approached my task, and trust that I have done the under- 
taking justice. At least, I have added to the rather limited body 
of available information relating to life-insurance practice and 
results a work containing the record of one institution to which 
the industrial population of this country is indebted for a new 
form of insurance, which has, forever, done away with the former 
crude and primitive types of so-called insurance societies and 
attempts to transact on the ancient basis of status a highly com- 
plex and intricate form of business enterprise, a business resting 
on recognized laws of human mortality and finance and possible 
of successful operation only on the basis of contract, the founda- 
tion principle of modern social life. 

Years of personal experience in the field of actual business 
operations, personal contact with hundreds of thousands of our 
working population of all nationalities in various parts of the 
country, have convinced me that, after all that has been said and 
written on the progress of the masses during the past fifty years, 
but scant justice has been done the people in the fully deserved 
recognition of their efforts to improve the conditions of their daily 
life in a manner and a way most likely to bring about the realiza- 
tion of their, perhaps indefinite, yet strong and worthy, aims. 
There are those who think little of what the workingman does for 
himself, who think that most of their progress and improvement 
is the result of charitable or philanthropic efforts, but I, for one, 
share no such views. Years of experience have forced upon me 
the conviction and belief that the working people can be trusted 
in matters pertaining to the solution of their own problems, and 
that they will accomplish more by agencies of their own than by 
artificial agencies devised by others. 

In the true and emphatic words of Mr. Herbert Spencer, 
''Which is the more misleading, belief without evidence, or 
refusal to believe in presence of overwhelming evidence ? ' ' and 
"If there is an irrational faith which persists without any facts 
to support it, there is an irrational lack of faith which persists 
spite of the accumulation of facts which should produce it ; 
and we may doubt whether the last does not lead to worse 
results than the first."* I feel convinced that the facts here 
brought together will lead those who for the first time learn of 

* The Ethics of Social Life, Part IV., I 133. 



SUMMARY OF CONCLUSIONS AND RESULTS. 317 

the vast extent of Industrial insurance, and the far-reaching 
results which have been accomplished through the work of The 
Prudential and other Industrial companies, to seriously consider 
whether this form of thrift and evidence of a healthy, robust 
struggle for economic independence, on the part of millions of 
working people, is not more deserving of approval and respect and 
sympathetic consideration than the many and far more costly 
efforts to ameliorate the condition of the people by artificial means 
through the medium of public or private charitable agencies. 
In simple justice to the wage-earners of this country, I feel con- 
vinced that never were words of Mr. Spencer more applicable 
to the affairs of daily life than in the following sentence, deserv- 
ing to be engraved on the mind and memory of all who have the 
best interests of the masses at heart : — 

"The average legislator, equally with the average citizen, 
has no faith whatever in the beneficent working of social forces, 
notwithstanding the almost infinite illustrations of this beneficent 
working. He persists in thinking of a society as a manufacture 
and not as a growth : blind to the fact that the vast and complex 
organization by which its life is carried on, has resulted from the 
spontaneous co-operations of men pursuing their private ends. 
Though, when he asks how the surface of the Earth has been 
cleared and made fertile, how towns have grown up, how manu- 
factures of all kinds have arisen, how the arts have been de- 
veloped, how knowledge has been accumulated, how literature 
has been produced, he is forced to recognize the fact that none 
of these are of governmental origin, but many of them have 
suffered from governmental obstruction ; yet, ignoring all this, 
he assumes that if a good thing is to be achieved, or an evil 
prevented, Parliament must be invoked. He has unlimited faith 
in the agency which has achieved multitudinous failures, and has 
no faith in the agency which has achieved multitudinous successes."* 

It was this clear recognition of social and economic laws and 
forces which made it possible for Mr. John F. Dryden to com- 
pletely realize his early ambition, and succeed in the laudable 
endeavor to make a success of Industrial insurance and The 
Prudential Insurance Company of America. And nowhere, to 
my knowledge, has this been stated more clearly and precisely 

* The Ethics of Social Life, Part IV., § 133. 



318 HISTORY OF THE PRUDENTIAL. 

than in Mr. Dry den's own words, in his presidential address at 
the reunion of officers and agents on January 10, 1900, than which 
I can select none better to conclude this sketch of the ' ' History 
of The Prudential Insurance Company of America ' ' : — 

" This is a wonderful business, gentlemen, in which you are 
engaged. I speak of it now not from the confines of The Pru- 
dential's work, but from that great, broad arena which compre- 
hends the whole scheme of life insurance, and may be found in 
operation in every country of the civilized world — a business with 
a noble history, a business with a lofty aim, a business with a 
magnificent purpose, a business with splendid results. I4ke 
most good and enduring things, its birth was humble and early 
advancement difficult. Originating back in remote antiquity, it 
has moved forward by slow stages, but in regular gradation, until 
to-day it stands upon a solid basis and challenges the admiration 
of the whole world. It could not be removed from the great 
scheme of the social and political economy of our civilization 
without bringing a disaster upon the human race which no man 
can foresee or measure, and that particular part of the plan, gen- 
tlemen, which has from its beginning characterized the history of 
The Prudential is more marvelous than all the others. 

" Taking its root in human affection, in that lofty desire to 
provide for one's own, the germ of it lying back out of our sight, 
even before recorded history began, it has gone on by a process 
of evolution — first the gild, then the burial societies, then the 
friendly societies — until at last it has been placed upon an immu- 
table and scientific foundation, and we have the Industrial insur- 
ance company. An Industrial company like The Prudential 
offers to the people a perfected and well-rounded-out scheme of 
life insurance, in that it places its blessings within the reach 
of all classes, male and female, rich and poor alike. It is the 
highest development of life insurance in existence. ' ' 



INDEX. 



3*9 



INDEX. 



Page. 
A 

A, B, C of life insurance, Indus- 
trial insurance the, 190 

Administration of agencies, . . . 270 

Adult rate table, five-hundred dol- 
lar, 126 ; colored, 138 ; 1896, . 228 

Advertisement of The Prudential, 
the Rock of Gibraltar, . . . 267 

American Exchange and Re- 
view on paid-up Industrial 
policies, 188, 189 

Arena, Industrial insurance dis- 
cussed in the, 190, 191 

Adverse legislation (see Children, 
Negroes, Surrender value). 

Agency system dispensed with, . 59 

Agents, life insurance, a necessity, 
14, 59, 86 ; praise of, 14, 231, 
249, 263, 265, 268 ; to their in- 
terest to prevent lapses, 123 ; 
importation of English Indus- 
trial, by Metropolitan, 132 ; In- 
dustrial, as insurance teachers, 
148 ; class of men employed 
as, 149, 271 ; fraudulent Indus- 
trial, 149 ; ex-, an injury to 
companies, 149 ; liberal treat- 
ment of Prudential, 156 ; diffi- 
culties of Industrial, 169 ; new 
terms to Prudential, 184 ; In- 
dustrial-Ordinary, 231, 242 ; 
faithful Prudential, 232, 233 ; 
inducement to, 238 ; instruc- 
tion of, 240 ; evidence of good 
character of, 241 ; position of 
Industrial, 241 ; evidence of 



Page. 

confidence in, 257, 261 ; Phil- 
lips Brooks on, 263 ; straight 
canvassing, 269 ; management 
of, 270, 271 ; loyalty of the 
Prudential, 282; number of, 
in the Prudential force, 1885- 
1900, 300. 

Ages, proportion of deaths at 
early, 311, 312 

Ages at death in the Prudential's 
experience, 1891-1898, .... 311 

Aid Societies in New York State, 
1848-1866, 16 

Aldcroft, W. H., on Industrial 
insurance, 223 

Alexander, Mrs. L. F., on Indus- 
trial insurance, 280 

American Humane Association, 
misstatement in report of the, 200 

American Life Insurance Compa- 
ny, of Philadelphia, Industrial 
business of the, . . ... 167 

American Manual of Life Insur- 
ance, The 8 

American Popular Life, weekly 
premium payment plan of the, 21 

Amounts of insurance, Prudential 
Friendly Society, 83 

Assets of The Prudential, i876-'99, 298 

Assets, investment of, . . . . . . 299 

Anglo-Saxon thrift defined, . . 4 

Anniversary, Tenth, of The Pru- 
dential, 156 

Annuities, Industrial, 100 

Application form, new, 240 



320 



INDEX. 



Page. 

Applications, to The Prudential 
Friendly Society, analysis of 
first 1,000, 79-83 

Approval, of Industrial Insurance, 
previous to 1875, 53 ; by insur- 
ance journals, 130, 147 ; offi- 
cial, 119, 134, 135, 155, 160, 161, 
180, 199, 206, 223, 224, 263, 273- 
276 ; general, 158, 159, 180, 221, 
264, 268, 278 ; public, 196-198, 
216, 217, 276, 277, 281 ; legis- 
lative, in Colorado and Ohio, 
281. 

Army and Navy, permit to Pru- 
dential policy-holders to serve 
in, 254, 255 

Arrears, notification of persons in, 
123 ; allowed delinquents, 244. 

Association, the principle of, 6 ; 
perversion of the principle of, 
19. 

Assurance Associations, Parlia- 
mentary Report on, 5 

Attacks on Industrial insurance, 
145 ; by ex-agents, 149 ; by 
newspapers, 150, 199, 200 ; in 
Colorado, 198 ; nature of, 206, 
207; in 1895, 213; in Massa- 
chusetts, 217, 229, 230 (see 
also Negroes, Children, Sur- 
render value). 

B 

Baltimore Underwriter, on Indus- 
trial insurance, 178; on The 
Prudential, 195, 196, 247, 248. 

Barry, Dr. Mary F., approval of 
Industrial insurance, 281 

Bartels, Arthur, effort to pass Col- 
orado House Bill No. 317, . .272 

Bassett, Allen I/., first president of 
The Prudential Friendly Soci- 
ety, 70 ; and the Industrial 
Insurance Company of the 
United States, 114, 115. 



Page. 

Beade, Rev. J. B., on Industrial 
insurance, . 9 

Beneficence of Industrial insur- 
ance (see Value of). 

Benefit, public, of Industrial in- 
surance (see Value of). 

Benefit societies, fallacies of, . . 131 

Benefits, additional, after five 
years, 236 ; value of, increased 
by The Prudential, 313, 314. 

Bettle, Hon. Wm., on Industrial 
insurance, 273 

Blanchard, Noah, president of The 
Prudential Insurance Co. of 
America, 70; death of, 144, 145. 

Board of Trade, Newark, investi- 
gation of Industrial insurance 
by the, 91 

Bonds, reduced fees for agents', 
241 ; agents', no longer re- 
quired, 252. 

Booth, Chas., on Industrial insur- 
ance, 164 

Boston Herald, on mass insurance, 
12 ; on Industrial insurance, 
178-180 ; on life insurance of 
children, 179 ; on adverse legis- 
lation, 229. 

Boston Standard, on Butler's attack 
on Industrial insurance, 150; on 
life insurance of children, 172 ; 
on The Prudential, 191, 192. 

Bradley, Mrs. Annie B., on Indus- 
trial insurance, 279 

British Industry, the, 9 

Brooks, Phillips, on life-insurance 
agents, 263 

Bund plan, a failure, 27, 103 ; of 
the Metropolitan, 28, 102 ; of 
the New York Life Insurance 
Co., 28, 29 ; of the Western 
New York Life Insurance Co., 
29 ; of the Life Insurance As- 
sociation of America, 29 ; of 
life insurance, 38 ; opposed by 
the Insurance Times, 39, 67 ; 
of the Prudential League, 89. 



INDEX. 



321 



Page. 

Burial, decent, of the dead, 4 ; the 
object of Industrial insurance, 

4, 143- 
Burial clubs among the English, . 5 
Burial expenses, primary object 

of Industrial insurance, .... 4 
Burial insurance a necessity, ... 32 
Burials of paupers (see Pauper 

burials). 
Burnett, Dr., tribute to John F. 

Dryden, no 

Butler, Benj., attack on Industrial 
insurance, 149 ; on the life in- 
surance of children, 149, 150. 



Camden Daily Telegram on The 
Prudential, .... 266, 267 

Canvassers, advertisement for, . 86, 87 

Canvassing, straight, advocated in 
1853, I2 V method of, 250. 

Capital, increase of Prudential's, 192 

Carlstadt Freie Presse on The 
Prudential, 143 

Charitable institutions, R. T. Ely 
on, 41 ; not in touch with in- 
dustrial conditions, 151. 

Charitable relief and Industrial 
insurance, 307, 30S 

Charities, Associated, of Boston, 
on Industrial insurance, . 278, 290 

Charity, W. G. Sumner on, 41 ; 
life insurance not, 34, 41, 144, 
203 ; Industrial insurance not, 
34, 144, 203 ; vs. Industrial in- 
surance, 203. 

Charity Organization Society, of 
Philadelphia, on Industrial in- 
surance, 172 

Charity Society of Louisville on 
Industrial insurance, 216 

Chicago Relief and Aid Society, 
Fortieth Report, reference to 
Industrial claim payment, . . 290 

Child Endowment, policies issued 
by The Prudential, 192 ; ex- 
plained, 192, 193. 

Child Insurance, a misnomer, . .120 



Page. 

Child life, value of, attempt to 
determine, 198 

Child mortality, its causes, 32 ; in 
New York City, 32 ; excessive 
prior to 1875, 55, 56 ; in New- 
ark, N. J., 55, 130. 

Child murder for insurance money 
denied, 179, 206 (see also Ap- 
proval) . 

Children, insured, mortality of, 
218 ; claims paid on, 219. 

Children, insurance of, early in- 
stance of, 8 ; first American at- 
tack on, 10 ; explanation of, 72, 
120, 179 ; a legitimate business, 
120 ; charges against, 128 ; aver- 
age amounts of policies, 128, 
150 ; parliamentary investiga- 
tion of, in England, 129 ; attack 
on, 150, 213 ; expert opinion 
on, 159 ; officially approved, 
161, 206, 273, 276 ; agitation 
on the, 172 ; objects of the, 
179 ; attempt to prohibit, 182, 
184, 198 ; legislative investiga- 
tion of, 182 ; legal recognition 
of, 183 ; perversion of facts as to 
the, 207 ; premium limit, 226, 
227 ; effort to regulate, 272, 
273 ; not contrary to public 
policy, 273, 280 ; favored by 
Denver citizens, 279-281 ; ap- 
proved by Ohio Legislature, 
281 (see also Approval). 

Chronicle, The, on insurance edu- 
cation, 148 ; on surrender value 
of Industrial policies, 171. 

Civilization and life insurance, . .318 

Claflin, Governor, of Massachu- 
setts, report on depositors in 
savings banks, 1870, ...... 25 

Claims, method of paying, The 
Prudential Friendly Society's, 
71, 76, 77 ; immediate payment 
of, 162, 163, 257 ; amounts of, 
paid by The Prudential, 1876- 
1885, 163; improved method 
of paying, 257. 



322 



INDEX. 



Page. 

Clark, John B., Consulting Actu- 
ary of The Prudential Friendly- 
Society, 6 1 ; actuarial data of, 
77 ; on surrender values, 87. 

Clark-Dryden correspondence, . . 61 

Clarke, Julius B., advocates Indus- 
trial insurance in Massachu- 
setts, 48 

Class insurance, in 1859, T 3 '» by 
Ordinary companies, 105. 

Class of people insured, in The 
Prudential, . . 194, 301, 302, 303 

Clerical force of The Prudential, 
1885-1900, 300 

Coal-miners, native, accepted by 
The Prudential . . 246 

Code, telegraphic, for claim pay- 
ments, 258 

Collector, a necessity in Industrial 
insurance, 261, 262 

Collins, J. B., on life insurance vs. 
savings banks, 11 

Collins, J. F., 117 ; death of, 231 ; 
sketch of, 232. 

Color line in life insurance (see 
Negroes), 137 

Colorado, insurance of children 
prohibited in, 198 ; law of 1893 
unconstitutional, 208 ; Insur- 
ance Department of, on Indus- 
trial insurance, 199, 208 ; effort 
to repeal law of 1893, 272 ; In- 
surance Commissioner of, on 
Industrial insurance, 276 ; Leg- 
islature of, in favor of Indus- 
trial insurance, 281 ; attempt 
to repeal the law of 1893, a 
failure, 281. 

Companies, organization of new 
Industrial, 100 

Competition, evil effects of, ex- 
cessive, .... 133, 146, 181, 184 

Complaints, rarity of, against In- 
dustrial insurance, . . . 135, 152 

Concessions, to policy-holders, 
made by The Prudential, 154, 
187, i95-i97> 214, 215, 227, 



Page. 

228, 235-238, 312, 313; made 
retroactive, 237 ; expected re- 
sult of, 238 ; cost of Prudential, 
2 39, 3 T 3 5 review of, 248, 249. 

Confidence, public, in The Pru- 
dential, 253, 314 

Connecticut, Insurance Commis- 
sioner of, on Industrial insur- 
ance, 160, 223, 275 

Conservative policy of The Pru- 
dential, 158 

Consumption clause, in the Pru- 
dential policy, 155 ; removed, 
229. 

Contract, the Industrial, of The 
Prudential, 312 

Co-operation, R. T. Ely on, 18 ; 
Herbert Spencer on, 18. 

Co-operative insurance associa- 
tions, based on false principles, 
19 ; frequency of failure of, 33. 

Co-operative insurance, fallacies 
of, 18 ; determining features 
of, 27 ; condemned, 33 ; vs. 
Industrial insurance, 51, 131, 

143- 

Cost, in Industrial insurance, dis- 
cussion of, 50 ; of Prudential 
concessions, 1886-1900, 313. 

Customs, ancient origin of pres- 
ent-day, 4 

D 

Deaths, thirty principal causes of, 
in the Prudential's experience, 

1891-1898, 310 

Debit, definition of, 269 

Definition of Industrial insurance, 
3 ; of life insurance, 34 ; of 
debit, 269. 
Demand for Industrial insurance, 
35, 37, 42, 50, 51, 53, 84, 85, 
92, 96, 98, no, in, 178, 253, 
286. 

Demolins, E., on thrift, 4 

Denver citizens on Industrial in- 
surance, 279-281 



INDEX. 



3*3 



Page. 

Denver Times on Industrial in- 
surance, 199, 200 

Devine, E. T., on morals and eco- 
nomics, 286 

Disbursements to Prudential 
policy-holders, 1876-1899, . 297 

Diseases, excessive prevalence of, 
previous to 1875, 55; mortality 
from principal, in The Pru- 
dential, 310, 311. 

Discrimination against negroes, 
laws prohibiting, 153, 159, 185 
(see also Negroes). 

Dividends, on Special Adult poli- 
cies, 182, 215 ; cash, after fif- 
teen years, 237 ; cash, method 
of payment of, 261. 

Drake, W. R., first applicant to 
The Prudential Friendly So- 
ciety, 58, 79 

Dryden, Forrest F., elected Secre- 
tary of The Prudential, . . . 183 

Dryden, John F., founder of The 
Prudential, 1 ; student of in- 
surance problems, 52, 57 ; vis- 
its Newark, 1873, 56 ; and the 
Widows' and Orphans' Friend- 
ly Society, 57, no; influence 
on, of Gladstone and Wright, 
57 , knowledge of insurance 
principles, 60 ; correspondence 
with J. E. Clark, 61 ; courage 
and energy of, 68 ; elected 
President of The Prudential, 
70, 145 ; visit to England, 94 ; 
Spectator on, 115, 145 ; on 
first infantile rate table, 121 ; 
circular on lapses, 124 ; on Im- 
mediate Benefit Concession 
to policy-holders, 125 ; on life 
insurance of negroes, 137 ; on 
expense-rate, 139 ; on lapse 
question, 139 ; on Prudential 
history, 156 ; on Prudential 
progress, 166, 248, 249 ; tribute 
to, no, 167 ; on Industrial in- 
surance as an educator, 193, 



Page. 

194; on the panic of 1893, 
J 95 i argument before the 
Colorado Legislature, 198, 
199 ; on insurable interest, 
198, 199 ; statement before the 
Insurance Committee of Mas- 
sachusetts, 218, 219, 222 ; ad- 
dress of, 1896, 230 ; on Indus- 
trial-Ordinary insurance, 230 ; 
Presidential elector, 230; letter 
on concessions, 235-238 ; on 
Prudential agents, 242 ; on 
revivals, 242, 243 ; address by, 
at Prudential banquet, 1898, 
2 5 2 > 253 ; letter on war risks, 
254, 255 ; letter to the field 
force, 265 ; tribute to Superin- 
tendent Egenolf, 282 ; tribute 
to Superintendent W. F. Law- 
son, 283 ; recognition of social 
forces, 317 ; address of, January 
10, 1900, 318. 
Duty, life insurance as a, .... 13 
Dykeman, C. V., Superintendent, 
anniversary of, 283 

E 

Economic aspects of Industrial in- 
surance, 68, 198, 284, 286, 287, 
315, 316. 

Eddy, H. H., Insurance Commis- 
sioner of Colorado, 273 

Educational value of Industrial 
insurance, 13, 14, 45, 105, 148, 
178, 190, 191, 193, 194. 

Egenolf, P., Superintendent, an- 
niversary of, . . 282 

Eichbauer, Frederick, death of, . 232 

Ely, Richard T., on scope of Po- 
litical Economy, 2 ; on co- 
operation, 18 ; on charitable 
institutions, 41 ; on life insur- 
ance, 284. 

Emigration, English, influence of, 
on American Industrial insur- 
ance, 33 



324 



INDEX. 



Page. 

Employees, insurance of Mont- 
gomery Ward & Co. 's, in The 
Prudential, 268 ; insurance of 
Ithaca Daily News' , in The Pru- 
dential, 268. 

Employees, Prudential, number 
of, 156 ; in 1886, 167 ; 1885- 
1900, 300. 

Endowment policies, Industrial, 
issued by The Prudential, 189 ; 
for children, explained, 192, 193. 

England, surrender value in, . . 296 

English, Stephen, on Industrial 
insurance, 31 ; reply to Elizur 
Wright, 47 (see Insurance 
Times). 

Entz, J. F., on mass insurance, 23, 
24 ; organized the Progress I/if e 
and Savings Insurance Co., 24 ; 
on family insurance, 24. 

Equity, the basis of the Pruden- 
tial contract, 88 ; evidence of 
Prudential, 228 ; the underly- 
ing principle of The Pruden- 
tial, 253. 

Evans, J. C, Colorado State Sen- 
ator, on Industrial insurance, 277 

Evolution, in life-insurance 
methods, 84 ; of the Prudential 
Industrial policy, 1876-1900, 
154, 312 ; of Industrial insur- 
ance, 164, 165, 314, 318; of 
Industrial-Ordinary insurance, 

259- 

Examination, official, of The Pru- 
dential, 204 

Exchange and Review, the, on 
life insurance, 22, 23 ; on the 
Bund or Union plan of life 
insurance, 27. 

Expense-rate in Industrial insur- 
ance, 50, 62, 139, 140 

Experience, necessary for im- 
proved tables, 61 ; the guide of 
The Prudential, 239. 

Experiment in the issue of Indus- 
trial policies, 259, 260 



Page. 

Extension, of business operations 
of The Prudential, 142 ; of in- 
surance principles to the mas- 
ses, 159. 

Extent of Industrial insurance, 
world-wide, 200, 284 

F 

Fackler, D. P., examination of the 
N. J. Mutual bjr, 99 ; examina- 
tion of The Prudential, 118; 
on Industrial insurance, 223, 
224. 

Fallacies, life insurance, 17 

Familien Schutz, Bund plan of in- 
surance, 29 

Family Bank plan of insurance, 
advocated by Elizur Wright, 
43 ; failure of, 44. 

Family insurance, need of, 24, 
306 ; Insurance Commissioner 
Clarke, of Massachusetts, on, 
49; approved, 85; demand 
for, 86 ; official approval of, 
152, 275. 

Farr's English Life Table com- 
pared with Prudential's expe- 
rience, 218 

Financial condition of The Pru- 
dential, in 1879, XI 8; New Jer- 
sey official report on, 204 ; sta- 
tistics of, 298, 299. 

Financial value of Prudential's 
concessions, 313 

Five-Hundred-Dollar Adult Rate 
Table, first, 126 

Foreign-born Industrial policy- 
holders in The Prudential, . . 302 

Fortuna Life Insurance Society, 
The, 28 

Foundation, solid, of The Pruden- 
tial, 267 

Fraternal insurance vs. Industrial 
insurance, 143 

Fraternal Orders, inherent defects 
of, 7 ; membership, 106 ; fal- 
lacies of, 131. 



INDEX. 



325 



Page. 

Friendly Society, an American, .111 
Friendly Societies, early, 5 ; Roy- 
al Commission on, 30, 34 ; fre- 
quency of failure of, 33 ; and 
Industrial insurance, 48, 49 ; 
and American Industrial insur- 
ance companies, 50; Neison 
and Ratcliffe on, 60 ; in 1875, 78. 
Fuel Saving Society of Philadel- 
phia, 8 

Funeral insurance, Walford on, . 35 
Funeral insurance companies, 35, 174 
Funeral rites, importance of, . . 4 
Funerals, extravagance of, 1875, 
66 ; expenses of, first object of 
Industrial insurance, 76 ; cost 
of, in Newark and New York, 
219, 220. 



Germania Life Insurance Co., In- 
dustrial business of the, . . . 161 

Germans, Industrial insurance ap- 
proved by, 143 ; as insurance 
risks, 302, 303. 

Germany, Industrial insurance in, 303 

Gibraltar, rock of, ... . 58, 119, 267 

Gilds, of the middle ages, 5 ; 
destruction of, by Henry 
VIII., 5. 

Gladstone, on post-office insur- 
ance, 16 ; attack of, on the 
British Prudential, 46. 

Government insurance, ... 16, 35 

Greene, Jacob L. , on the first duty 
of a life company, 296 

Guizot, criticism of English 
thought, 2 

Gummere, on early importance 
of funeral rites, 4 

H 

Hadley, A. T., on individual 
responsibility, 221 

Hadley, H. H., and the Peabody 
Life, 36 ; experiments in life 
insurance, ........ 36 



Page. 
Haggart, Thos., death of, .... 247 

Hahne & Co., Newark, N. J., part- 
nership insurance of, in The 
Prudential, 262 

Hamill, Dr. Edward H., on de- 
clined risks, 200 

Harben, Henry, testimony before 
the Royal Commission, 30 ; 
on agitation for Industrial in- 
surance in America, 30 ; on the 
history of the British Pruden- 
tial, 30 ; reply to EHzur Wright, 
46 ; defends the British Pru- 
dential, 47 ; on sickness insur- 
ance, 95 ; on mortality expe- 
rience of British Prudential, 
129. 

Harvey, Augustus F., on Indus- 
trial insurance, 158 

Hauck, Jacob, on Industrial insur- 
ance, 279, 280 

Hawes, Dr. Edwin, on Industrial 
insurance, 216 

Health insurance, in 1845, 9 ; fail- 
ure of, 9 ; fallacies of, 17 ; at- 
tempt to organize, by Pruden- 
tial Friendly Society, 61, 62, 63 
(see also Sickness insurance). 

Henry VIII., destruction of Gilds 
by, 5 

Hildise Bund, of the Metropolitan 
Life Insurance Company, 28 ; 
a failure, 106 ; cumbrous meth- 
od of, 146. 

Hilfinnoth, Bund plan of insur- 
ance, 29 

Hobart, Garret A., on Industrial 
insurance, 96 

Hodgkins, Dr., on benefit socie- 
ties, 131 

Hoffman, F. L-, on negro mor- 
tality, 139 

Holway, D. N., on the science of 
life insurance, 27 ; on Indus- 
trial insurance, 190. 



326 



INDEX. 



Page. 

Home office of The Prudential, 
ioo, 147, 176 ; occupation of 
new, 191, 192 ; preparation to 
enlarge, 281, 282. 
Honesty of agents, evidence of, . 252 
Hunt's Merchants' Magazine, on 
Industrial insurance, 9 ; on life 
insurance vs. savings banks, 11. 



Illinois, Insurance Superintend- 
ent of, on Industrial insurance, 
274 ; murder of insured chil- 
dren unknown in, 274. 

Imitations, fraudulent, of Indus- 
trial companies, 23 

Immediate benefit, problem of, 
124 ; change in, by Prudential, 
154 ; provisions of The Pru- 
dential, 202 ; under Industrial 
policies, 215. 

Improvement in the Prudential 
policy, 1876-1900, 312 

Income, premium, of The Pru- 
dential 1876-1899, 291 ; total, 
of The Prudential, 1876-1899, 
292. 

Incontestability, after six months, 
attempt to obtain, in Illinois, 
184 ; of Industrial policies, 
after two years, 214. 

Independent, New York, on The 
Prudential, 213 

Indicator, on negro life insurance, 
209 ; on The Prudential, 231. 

Industrial, explanation of the 
term, 3, 160, 161 

Industrial and Commercial, Ham- 
ilton, Ont., 59, 60 

Industrial and General, The, first 
English Industrial companj^, 3 ; 
founded, 1849, 5 5 description 
of, 9. 

Industrial companies, fraudulent 
imitations of, 23 ; early effort 
to organize, 22 ; reasons for 



page. 

the success of, 49 ; Govern- 
ment aid in organization of, 
51 ; organization of, a public 
duty, 54. 

Industrial depression, effect of, 
on Industrial insurance, . . . 155 

Industrial insurance, compared 
with Ordinary insurance, 3, 
485 ; defined, 3 ; objects of, 
4, 287 ; educational aspect of, 
13, 14, 45, 105, 148, 178, 190, 
191, 193, 194; demand for, 
35, 37, 42, 50, 51, 53, 84, 85, 
92, 96, 98, no, in, 178, 253, 
286 ; and public policy, 45, 113; 
principles of, partly recog- 
nized, 8 ; first reference to, in 
America, 9 ; early opposition 
to, 15 ; public confidence in, 15 ; 
early recognition of the value 
of, 23 ; principles of, recognized 
by 1870, 24 ; influenced by 
English emigration, 33; growth 
of sentiment in favor of, 34 ; 
early development distinct 
from Ordinary companies, 39 ; 
in the United States, beginning 
of, 39 ; superior to savings 
banks, 43 ; various opinions on, 
44 ; considered impracticable 
in 1874, 45 ; attacked by Elizur 
Wright, 46 ; method of, ex- 
plained, 48 ; conditions favor- 
ing, 56; founders of,in America, 

58, 63 ; attempted in Canada, 

59, 60 ; and funeral extrava- 
gance, 66 ; early difficulties of, 
68; actuarial basis of, 61, 62, 
75, 76, 77; simplicity of, 76; 
equity of system, 76 ; English 
origin of, 78 ; in force in the 
United States, 1879, 116; offi- 
cially recognized in Massachu- 
setts, 119, 120 ; is not a charity, 
34, 144, 203 ; in Massachusetts, 
significant approval of, 222 ; 
' ' the wonder of the age, ' ' 247 ; 



INDEX. 



327 



Page. 

not a manufacture, but a 
growth, 2S6 ; in force in The 
Prudential, 1876-1899, 288 ; the 
highest development of life 
insurance, 318 (see also- 
Moral aspect, Social aspect, 
Approval, and Value). 

Industrial insurance company, 
first, in England, 3 ; first effort 
to organize, in America, 21. 

Industrial Life Insurance Co. of 
New York, the, attempt at or- 
ganization, ... .... 22 

Industrial Insurance Co. of the 
United States, 114 

Industrial Insurance Co. of Amer- 
ica, a fraud, 173 

Industrial insurance societies, 
fraudulent, 89, 93, 173 

Industrial-Ordinary insurance, 127, 
165, 191, 194, 230, 231. 

Industrial-Ordinary lapse release, 259 

Industrial-Ordinary policy, differ- 
ent from Ordinary, 290 

Industrial policies, increasing in 
amount, 289 ; average amount 
of Prudential, 289. 

Industrialism, Lecky on, .... 315 

Infantile applications, not indica- 
tive of adverse selection, ... 81 

Infantile rate table, Prudential 
Friendly Society, 72 ; 1879, 
108, 121 ; 1896, 225. 

Influenza, epidemic of, 183 

Instructions, Agents' Manual of, . 240 

Insurable interest defined, 49, 161 , 
179, 198, 199. 

Insurance and Commercial Maga- 
zine on Industrial insurance, . 147 

Insurance Commissioners, special 
committee of, on Industrial 
insurance, 122 

Insurance Critic, on real estate 
purchase, of The Prudential, 
176, 177 ; on The Prudential, 
233. 234. 



Page. 

Insurance enterprises, fraudulent, 
in 1868, 18 

Insurance Herald, on statement 
of Mr. J. F. Dryden, 222 

Insurance in force in The Pruden- 
tial, December 31, 1876, 93; 
1877. 99 ; 1878, 108 ; 1879, n6 ; 
1880, 132; 1881, 142; 1882, 146, 
147 ; 1883, 151 ; 1884, 153, 154, 
155; 1885,159; 1886,166; 1887, 
169 ; 1888, 175 ; 1889, 181 ; 1890, 
184 ; 1891, 185, 186 ; 1892, 191 ; 
1894, 202, 203, 212; 1895, 224; 
1897, 247 ; 1898, 264 ; 1899, 283. 

Insurance Journal, New York, on 
The Prudential, .... 196, 197 

Insurance Times, on Health in- 
surance fallacies, 17 ; on Indus- 
trial insurance, 31, 32, 34, 39, 
112, 131 ; in 1874, 45; in 1875, 
67; in 1879, in; on Elizur 
Wright, 44; on Insurance 
Commissioner Clarke's report, 
52 ; reasons for favoring In- 
dustrial insurance, 53, 54 ; on 
funeral extravagance, 66 ; on 
taxation of life insurance, 
256. 

Insurance World, on Industrial 
insurance, 60, 102 ; recognizes 
necessity of Industrial insur- 
ance, no; on The Prudential, 
118 ; on surrender value of In- 
dustrial policies, 170, 171. 

Intemperance clause in the Pru- 
dential policy, eliminated, . . 155 

Intermediate insurance, 105 ; of " 
The Prudential, 245. 

International Life of London, re- 
insurance of, 29 

Investment features of Industrial 
insurance, 290 

Investments, analysis of Pruden- 
tial, 299 

Issue of new business by The 
Prudential, 1876-1899, .... 293 



328 



INDEX. 



Page. 

Issue, weekly Industrial, of The 
Prudential, 300 ; weekly Ordi- 
nary, of The Prudential, 300. 

Ithaca Daily News, Industrial in- 
surance of employees, . . 268, 269 



Jersey City Journal on Industrial 
insurance, 97 

John Hancock Mutual Life, Pru- 
dential branch of, 101 ; com- 
mences Industrial insurance, 

115. 

Johnson, A. B., attack on life in- 
surance, 10 

Jones, Hugh R., on insurance of 
children, 223 

K 

Keyes, E. W., savings bank plan 
of insurance, 36 



Laboring Men's Life Insurance 
Co., Chicago, 111., 20 

Labor problems vs. Industrial In- 
surance, 284 

Labor-Term insurance, 36 

Lapsed policy-holders, treatment 
of, 296 

Lapses, circular on, 123 ; efforts 
made to prevent, 123, 180, 195, 
196, 225, 244, 251, 252, 265, 280 ; 
official opinion on the question 
of, 135 ; a loss to the company, 
139, 141, 294 ; in Industrial in- 
surance, 139, 171, 179, 197, 198, 
296 ; Weekly Underwriter on 
question of, 141 ; misconcep- 
tion as to importance of, 142, 
212 ; consideration of question 
of, 212 ; reduction of, 238 ; a 
serious problem, 252. 

Lawson, W. F., Superintendent, 
anniversary of, 283 

Lecky, W. E. H., on public 
opinion, 222 ; on conduct and 



PAGE. 

progress, 287 ; on Industrial- 
ism, 315. 

Legislation, evils of, in dealing 
with life insurance, 41; neces- 
sity of restrictive, 135 ; Her- 
bert Spencer on ill-advised, 
317 ; adverse, attempts at (see 
Children, Negroes, Surrender 
value). 

Liabilities, of The Prudential, 
1877-1899, 298 ; analysis of The 
Prudential, 299. 

Liberality, and equity of The 
Prudential, 195, 239. 

License fees of Industrial agents, 136 

Lien provision of Industrial poli- 
cies, 243 

Liens, form of Industrial policy, 243 

Life insurance, mass vs. class, 3 ; 
for the masses, 8, 11, 12, 17, 21, 
2 3> 76, 77 ; vs. savings banks, 
10, 11, 25, 42,43, 285; ignorance 
of the principles of, 11 ; for 
small amounts, 12, 16 ; for the 
poor, 13, 23, 41, 64, 102, in, 
112 ; as a duty, 13 ; and educa- 
tion (see Educational value) ; 
in i860, 13 ; lack of confidence 
in the principles of, 15 ; ten- 
dency of, in 1864, 16 ; in 1868, 
20 ; moral obligation of, 21 ; 
scientific principles of, 27 ; 
Bund or Union plan of, 28, 29, 
89, 102 ; new departure in, 30 ; 
not philanthropy, 34, 41, 144, 
203 ; definition of, 34 ; secur- 
ity, the first element in, 34, 50 ; 
savings bank plan of, 36 ; for 
the poor, defined, 41 ; nature 
of, 41 ; attacked by Elizur 
Wright, 43 ; for those who 
need it most, 67. 

Life Insurance Association of 
America, Bund plan of, . . . 29 

Life Insurance Co. of Virginia, . 168 

Limit of insurance, Prudential 
Friendly Society, 70 



INDEX. 



329 



Page. 



Loans on Industrial policies, 243, 244 
Loyalty of the Prudential force, 282 



M 



McDermott, Thos. L-, on Indus- 
trial insurance, .... 216, 217 

Mackay, T., on tendency of 
wage-earners towards econom- 
ic independence, 190, 191 ; on 
Industrial insurance, 221. 

Maine, explosion of the U. S. S., 
253 ; Prudential policy-holders 
lost in the explosion of the, 254. 

Malone, Rev. T. H., on Industrial 
insurance, . . 277 

Management of The Prudential, 
efficiency of the, 155 

Management of agents, . . 270, 271 

Manchester Order of Unity, ... 60 

Manhattan Co-operative Relief 
Association, 18, 19 

Masses, life insurance for the, 8, 
11, 12, 17, 21, 23, 76, 77. 

Mass insurance, vs. class insur- 
ance, 3 ; by The Prudential, 179. 

Massachusetts, attempt to prohibit 
insurance of children in, 217; 
failure of attempt to prohibit 
insurance of children in, 221 ; 
efforts at adverse legislation in, 
229, 230 ; Deputy Insurance 
Commissioner of, on Indus- 
trial insurance, 275. 

Massachusetts Insurance Commis- 
sioner, on negro discrimina- 
tion, 153 ; on Industrial insur- 
ance, 48, 160, 161, 180. 

Massachusetts Insurance Report, 
of 1874, on Industrial insur- 
ance, 48, in ; on Industrial in- 
insurance in 1880, 119. 

Massachusetts Labor Commission 
on savings bank depositors, . . 25 

Massachusetts Labor Report, on 
life insurance, 1875, 65 ; on 
charity, ill. 



Page. 

Massachusetts S. P. C. C, opposi- 
tion to insurance of children, 
217 ; change of views on the 
insurance of children, 217. 

Maternal instinct, among working 
women, 128 ; among the poor, 
279, 280. 

Medical Director, instructions is- 
sued by The Prudential, . . . 240 

Medical examinations, in Indus- 
trial insurance, 201, 202; on 
revivals, 244 ; ratio of, to rejec- 
tions, 309. 

Medical inspection, .... 239, 240 

Medical statistics of The Pruden- 
tial, 309, 312 

Methods of transacting Industrial 
business, 240, 241 

Metropolitan Life Insurance Co., 
Bund plan of, 28, 102 ; com- 
mences Industrial insurance, 
116; progress of, 132; exami- 
nation of, 205. 

Metuchen Inquirer on The Pru- 
dential, 134 ; on Prudential 
progress, 177. 

Military service, no extra charge 
for, 255 

Mill, J. S., on taxation of life in- 
surance, 256 

Miners' and Mechanics' Life In- 
surance Co., 20 

Minors, life insurance of (see Chil- 
dren). 

Minority, Colorado House Bill No. 
317 defeated by a small, . . . 281 

Misrepresentation of Industrial in- 
surance, 200 

Missouri Valley Life, insurance 
scheme of, 36 ; insurance plan 
of, and failure, 37. 

Monitor, Insurance, on life insur- 
ance for the poor, 13 ; on Gov- 
ernment insurance, 16; on 
tendency of life insurance in 
1864, 16 ; on life-insurance 
fallacies, 17 ; on insurance for 



33° 



INDEX. 



Page. 

the masses, 17, 21 ; on The Pru- 
dential Friendly Society, 78 ; 
on Industrial insurance, 105 ; on 
the Bund plan in life insurance, 
106 ; on the progress of The 
Prudential, 117 ; on Prudential 
liberality, 187, 188 ; on surren- 
der value law of 1895, 214 ; on 
Industrial rates, 226 ; on the 
success of The Prudential, 266. 

Monthly premium payment plan, 
of Mutual Benefit of Newark, 
21 ; advocated, 32 ; inadequacy 
of, 32 ; endorsed by the Insur- 
ance Times, 40 ; of the John 
Hancock Mutual, 10 1. 

Moon, J., on Industrial insurance, 223 

Moral aspect of Industrial insur- 
ance, 21, 68, 91, 113, 234 

Morgan, Nathan D., on Industrial 
insurance in 1874, 44, 45 

Mortality of children, 32 ; exces- 
sive, as explaining the demand 
for Industrial insurance, 32 ; of 
New York City, excessive dur- 
ing 1870-1872, 32 ; excessive 
in American cities previous to 
^75, 55 ; statistics of negro 
population, 138; comparative, 
of children and adults, 220 ; by 
age and sex, in Prudential ex- 
perience, 311. 

Mortality experience, investiga- 
tion into Prudential, 159 ; of 
children insmed in The Pru- 
dential compared with Fair's 
Table, 218; The Prudential, 
1891-1898, 310, 311. 

Motto of The Prudential, .... 225 

Mowatt, James A., on Industrial 
insurance, 46 

Murder of children for insurance 
money, not proven, 128, 129 ; 
unknown, 150, 152, 207, 208, 
217, 274, 276 ; denied, 150, 223. 

Mutual Benefit Life Insurance Co. , 
Newark, N. J., effort to estab- 



Page. 
lish weekly premium pay- 
ments in 1847, 8 

N 

National character of Industrial 
insurance, ...... 303, 307 

Nationality of Industrial policy- 
holders in The Prudential, . 302 

Necessity, Industrial insurance a, 134 

Neglect of insured children prac- 
tically unknown, . . 207, 217, 223 

Negroes, insurance of, 137, 185, 
208, 209, 211; first Pruden- 
tial adult rate table for, 138 ; 
discrimination against, pro- 
hibited in Massachusetts, 153 ; 
in Rhode Island, 159 ; in New 
York, 185 ; discrimination 
against, 207 ; excessive mor- 
tality of, 137, 209, 302 ; mortal- 
ity of, in Prudential experi- 
ence, 210 ; not solicited by The 
Prudential, 211; Leslie D. 
Ward on insurance of, 209-211. 

NeisonandJ. F. Dryden, .... 60 

Newark Daily Advertiser on The 
Prudential, 74. 75, 90, 91 

Newark Daily Journal on The 
Prudential, 147 

Newark Evening Courier on The 
Prudential Friendly Society, 
58, 75, 76. 

Newark Morning Register on The 
Prudential Friendly Society, 
58 ; on Industrial insurance, 76, 
77 ; on The Prudential, 144, 267. 

Newark, N. J., birthplace of In- 
dustrial insurance, 56 ; pauper- 
ism in, previous to 1875, 56 ; 
a favorable field to organize an 
Industrial company, 78 ; mor- 
tality of children in, 130 ; be- 
neficent results of Industrial 
insurance in, 307 ; decrease in 
pauper burials in, 307 ; large 
proportion of industrial popu- 
lation insured, 307. 



INDEX. 



331 



Page. 

Newark Sunday Call, on The Pru- 
dential Friendly Society, 85, 
86 ; on The Prudential, 133, 134. 

New Era in Industrial insurance, 
187, 235. 

New Hampshire Insurance Com- 
missioner on Industrial insur- 
ance, 263 

New insurance, explanation of, 
212 ; issued by The Prudential, 
1876-1899, 293 

New Jersey, attempts at adverse 
legislation in, 184 ; law prohib- 
iting discrimination against 
negroes, 208, 209 ; surrender 
value question in, 211, 212 ; 
surrender value law of, 214 ; 
Insurance Commissioner of, on 
Industrial insurance, 273, 274. 

New Jersey Mutual, failure of the, 98 

Newspaper attacks on Industrial 
insurance, . . . 150, 199, 200, 277 

New York City, excessive mor- 
tality in, 32 ; pauper burials in, 
32, 56 ; infant mortality in, 312. 

New York Insurance Department 
on Industrial insurance, 205, 274 

New York Insurance Report, on 
industrial depression, 155 ; on 
Industrial insurance, 134, 135, 

151, 155- 

New York Life Insurance Co., 
Union plan of, 27, 28, 29 ; offi- 
cers of the, attempt Industrial 
insurance, 114. 

New York Life Insurance and 
Trust Co. , insurance for small 
sums by the, 12 

New York State, Prudential en- 
ters, 117; insurance license 
question in, 136 ; attempt to 
prohibit the insurance of per- 
sons under ten years in, 182 ; 
Insurance Superintendent of, 
on Industrial insurance, 274 ; 
murder of insured children 
unknown in, 274. 



Page. 

New York Workingmen's Bene- 
fit Co., 20 

Non-forfeiture, law not applicable 
to Industrial insurance, 122 ; 
in Industrial insurance, 164, 
165 (see Surrender value, 
Lapses, Paid-up insurance). 

Notification law not applicable to 
Industrial insurance, 122 

O 

Objects of Industrial insurance, 4, 
287, 316. 

Occupation, of first male appli- 
cants to The Prudential Friend- 
ly Society, 80 ; restrictions re- 
moved, 155 ; restrictions on, 
245, 246 ; of Prudential Indus- 
trial policy-holders (male), 304, 
305 ; of Prudential Industrial 
policy-holders (female), 306; 
dangerous, of Industrial pol- 
icy-holders, 310. 

Odd Fellows in America, .... 8 

Office force of The Prudential, 
1885-1900, 300 

Ohio, Insurance Superintendent 
of, on Industrial insurance, 171, 274 

Ohio, murder of insured children 
unknown in, 274 ; attempts to 
prohibit the insurance of chil- 
dren under 12 years defeated 
in, 281. 

Old Guard, Prudential, explana- 
tion of, 177 ; privileges of, 
241 ; membership in, 282, 

Opposition to Industrial insur- 
ance, early, 15 ; reasons for, 141 ; 
character of, 150 ; a class sen- 
timent, 278 (see Approval). 

Orange Journal, N. J., on value of 
Industrial insurance, ..... 308 

Ordinary-Industrial insurance, 127, 
165, 191, 194, 230, 231. 

Ordinary insurance, vs. Industrial 
insurance, 3, 285 ; attacks on, 
10, 26 ; by Industrial com- 
panies, 165 ; commenced by 



332 



INDEX. 



Page. 

The Prudential, 165 ; in force 
in The Prudential, 1886-1899, 
288 ; proportion of total busi- 
ness, 290. 
Ordinary policies, average amount 

of Prudential, 289 

Origin of Industrial insurance, 78, 318 
1 ' Our American Union ' ' on life 
insurance, ..'... 10 



Paid-up Industrial insurance, 211, 
212, 214, 237; misstatement 
about, by University Settle- 
ment Society, 213 ; explained, 
187, 188 ; granted by The Pru- 
dential, 265 ; 1 890- 1 899, 295. 

Panic and depression, of i873-'78, 
effect on Industrial insurance, 
68 ; of 1893, effect of, 195 ; 
effect of, on life insurance, 
203. 

Partnership insurance by The Pru- 
dential, ... 262 

Paterson Guardian on Industrial 
insurance, 97 

Paterson Press on The Pruden- 
tial, 142, 143 

Pauper burials, the abhorrence of, 
4 ; in New York City, 32 ; and 
Industrial insurance, 147, 148 ; 
decrease in, 307, 308 ; table of, 
for ten American cities, 1880- 
1899, 308. 

Pauperism, in Massachusetts, 1875, 
65; insurance against, 114; and 
Industrial insurance, 147, 148 ; 
prevented by Industrial insur- 
ance, 280 ; in American cities 
previous to 1875, 56. 

Paupers, life insurance of, un- 
profitable and impracticable, .112 

Peabody Life, savings bank plan 
of insurance, 36 ; weekly pre- 
mium payment plan of, 36. 

Peacock, Mr., effort of, to organ- 
ize an Industrial company, . 21, 22 



Page. 

Pennsylvania, attempt to prohibit 
insurance of children in, 172 ; 
Insurance Commissioner of, 
on Industrial insurance, 275 ; 
murder of insured children 
unknown in, 275. 

Pennsylvania Co. for Insurance of 
Lives, 8 

Pensions, industrial, old age, im- 
practicable, 73 

People's Life Insurance Co. of 
New York City, 20 

People's Insurance Co. of Nor- 
wich, Conn., 168 

Peto, Sir S. Morton, on taxation 
of life insurance, 256 

Philadelphia Charity Organization . 
Society on Industrial insur- 
ance, 172 

Philadelphia Intelligencer on 
paid-up Industrial policies, 188, 189 

Philanthropy, insurance is not, 
34, 144, 203. 

Piedmont and Arlington Life In- 
surance Co., connection with 
the Widows' and Orphans' 
Friendly Society, 38 

Pittsburg Dispatch on Industrial 
insurance, 149 

Piatt, Sarah S., on Industrial in- 
surance, 276, 277 

Police, chief of, on Industrial in- 
surance in Louisville, ... 217 

Policemen's Insurance Fund, in 
New York City, 17 

Policy, return of, if not satisfac- 
tory, 228 ; new, of The Pruden- 
tial, 236, 237 ; average amount 
of Industrial and Ordinary, 
289. 

Political economy and Industrial 
insurance, 2 (see also Eco- 
nomic aspects). 

Poor, life insurance for the, 13, 23, 
41, 64, 102, in, 112. 

"Poor man's friend," The Pru- 
dential the, 144 



INDEX. 



333 



Page. 

Population, sex distribution of, 
insured in The Prudential, . . 306 

Post-office insurance, 16 

Poverty and pauperism, difference 
between, 73, 112 

Premium payment plans, 8, 21, 
27, 32, 36, 40. 

Premium payments, methods of, 
Prudential Friendly Society, . 70 

Premium Rates of Industrial Com- 
panies, discussion of, 50 

Premiums, weekly, first applied in 
life insurance, 8 ; paid out of 
luxuries, not necessities, 73; 
weekly payment of, preferred, 
82 ; unpaid portion of annual, 
deducted from claim, 124 ; re- 
turn of first two weeks', if pol- 
icy is not satisfactory, 228 ; 
limit of, in insurance of chil- 
dren, 226, 227 ; income of The 
Prudential, 1876-1899, 291. 

Principles, life insurance, igno- 
rance of, 11 ; life insurance, 
lack of confidence in, 15 ; Pru- 
dential foundation, 176 ; busi- 
ness, of The Prudential, 253. 

Printing and Supply Departments 
of The Prudential, 301 

Privileges of the Prudential Old 
Guard, 241 

Problem, The Prudential solves 
the insurance, 144, 146 

Profit-sharing policies, Industrial, 242 

Progress Life and Savings Insur- 
ance Co. of the United States, 24 

Progress of The Prudential Insur- 
ance Co. (see Insurance in 
force). 

Propinquity of Industrial insur- 
ance, 102 

Provident Savings Assurance So- 
ciety, attempt to transact busi- 
ness without agents, 65 ; com- 
menced Industrial insurance, 
114; discontinued Industrial 
insurance, 142. 



Page. 

Pseudo life-insurance companies, 173 

Prudential Benefit Society, The, 
Newark, N. J., 93 

Prudential League, Harrisburg, 
Pa., 89 

Prudential, the, of Kn gland, model 
for the American company, 1 ; 
and the Industrial and General, 
5 ; and the International Life, 
29 ; influence of, on American 
insurance development, 16 ; 
in 1864, 16; in 1868, 21; 
method of business, 23 ; his- 
tory of, 30; in 1872, 31; In- 
surance Times on, 41 ; attacked 
by Gladstone, 46 ; in 1874, 60 
(see Harben, Henry). 

Prudential Friendly Society, The, 
organized, 1875, 38; in 1875, 
57 ; first application to, 58 ; 
"founded on a rock," 58; 
founders of, 58, 63 ; organiza- 
tion difficult, 63 ; first Board 
of Directors, 69, 85 ; first pros- 
pectus of, 70 ; medical exam- 
ination not required, 70 ; rates 
charged by, 72, 73 ; foundation 
principles of, 74, 75, 85 ; ob- 
jects and methods, 71, 74, 75 ; 
benefits of plan, 76 ; progress 
of, in 1875, 79; class of per- 
sons insured in, 80 ; progress 
of, 1876, 84, 92, 93 ; approval 
of plan of, 85, no ; early finan- 
cial difficulties, 93; title 
changed to The Prudential In- 
surance Co. of America, 95. 

Prudential Insurance Co. of 
America, The, Newark, N. J., 
first American Industrial in- 
surance company, 1 ; foun- 
dation principles of, 63, 64 ; 
"founded on a rock," 77; 
an institution for all, 77 ; ex- 
tends its operations, 95; capi- 
tal increased, 117 ; name of, a 
household word, 119; Insur- 



334 



INDEX. 



Page. 

ance Times on, 131 ; praise of, 
I 33> *34 I newspaper attack on, 
145 ; tenth anniversary of, 
156 ; public discussion of 
method of, 166, 167 ; growth 
of, 176 ; Boston Herald on, 
180 ; paid-up policies of, 187 ; 
grants surrender values, 188, 
189 ; insurance in force, 1876- 
1899, 288 ; total income of, 
1876-1899, 292 ; new business 
issue, 1876-1899, 293 ; paid-up 
policy issue, 1890-1899, 295 ; 
payments to policy-holders, 
1876- 1899, 297 ; surplus of, 
1876-1899, 298 ; assets of, 1876- 
1899, 298 ; liabilities of, 1877- 
1899, 298. 

Prudential Insurance Co. of Amer- 
ica, New York City, 52 

Prudential Life Insurance Co., 
Columbus, Ohio, 34 

Prudential Mutual Aid, Harris- 
burg, Pa., 90 

Prudential Weekly Record, The, 
on the Rock of Gibraltar, 267 ; 
published for the field force, 
301. 

Public charit}^ and Industrial in- 
surance, 113 

Public policy and Industrial in- 
surance, 45, 113 

R 

Ratcliffe and J. F. Dryden, ... 60 
Rates, premium, relation of mor- 
tality to, 109 ; change in Pru- 
dential, October 6, 1884, 154 ; 
January 4, 1886, 164; in 1890, 
184 ; in 1896, 225. 
Rate tables, first adult, Prudential 
Friendly Society, 71 ; first in- 
fantile, Prudential Friendly So- 
ciety, 72 ; Prudential infantile, 
. 1879, 108 ; Prudential adult, 
1879, 109 ; first infantile, Pru- 
dential Insurance Co., 121 ; 



Page. 

Five -Hundred Dollar, adult, 
126 ; Prudential, for colored 
risks, 138; Child's Endowment, 
193 ; Prudential infantile, 1896, 
225 ; Prudential adult, 1896, 
228 ; Prudential intermediate, 
246. 
Real estate, purchase of, for Pru- 
dential office building, . .175, 176 

Receipt books, cost of, assumed 
by The Prudential, 260 

Reese, Dr. R. M., on insurance 
education, 13 

Regulation, statutory, of Indus- 
trial insurance, 183 

Regulating statute, efforts in 

Colorado to pass a 272 

Rejected lives, observation on, . 200 

Rejections, medical, in Pruden- 
tial Industrial and Ordinary 
Departments, 309 

Relief and Aid Society, Chicago, 290 
Religious press on Manhattan Co- 
operative Relief Association, . 19 
Reserve, required on Industrial 
policies, 119 ; on infantile 
policies, 120 ; on Industrial 
policies, discussion on, 151. 

Retail principle in life insurance, 105 
Revival privileges of Industrial 

policy-holders, 89, 124, 195, 

196, 242, 243. 
Reynolds, Dr. F. S., on Industrial 

insurance, 217 

Rhodes 's United States Advertiser 

on mass insurance, 11 

Ribot, T., on scientific evidence, 315 
Risks, Industrial, character of, 

82, 83, 302-307. 
Rochdale, Industrial insurance in, 42 
Roman Collegia, the, as insurance 

associations, 5 

Royal Liver Friendly Society, 

Liverpool, Eng. , 60 ; mortality 

experience of the, 129. 



INDEX. 



335 



Page. 
S 

St. Peter's Workingmen's Benefit 
Club, in 

Savings, semi- compulsory, by 
Industrial insurance, 43; sys- 
tematic, increased by Indus- 
trial insurance, 309. 

Savings banks vs. life insurance, 
10, 11, 25, 42, 43, 59, 285. 

Savings Bank Commission of 
Massachusetts, report of 1852, 25 

Savings banks depositors of Mas- 
sachusetts, wealthy, 25, 26; 
Governor's message on, 25. 

Saving habits, undeveloped, 25 ; 
of the masses in 1872, 25 ; de- 
veloped by Industrial insur- 
ance, 26, 43, 309. 

Savings institution, life insurance a, 284 

Security the essential principle in 
life insurance, . . .34, 50, 77, 299 

Selection, adverse, in Industrial 
insurance, 202 

Self-solicited insurance for the 
masses, fallacy of, 64, 65 

Sentiment as a factor in legislation, 153 

Sex distribution, of persons in- 
sured in The Prudential, 306 ; 
of decedents, in the Pruden- 
tial's experience, 311. 

Shannon, M., on Industrial insur- 
ance, 205 

Sickness, excessive, previous to 
1875, 55 ; inadequacy of statis- 
tics of, 61 ; statistics of, 77. 

Sickness insurance, attempt at, 

61, 62, 63 ; discontinued by The 
Prudential Friendly Society, 

62, 95 ; in small demand, 83, 
100 ; branch of Industrial com- 
panies, 94 ; why a failure, 94, 
95 ; a failure, 108 (see also 
Health insurance). 

Small amounts, life insurance for, 
12, 104, 105. 



Page. 

Smith, Heber, on Industrial insur- 
ance in 1874, 44 

Social aspects of Industrial insur- 
ance, 104, 113, 169, 178, 190, 
191, 193, 194, 234, 284, 286, 315, 
316. 

vSolvency, of Industrial insurance 
companies, 132 ; of The Pru- 
dential, 299. 

Special Adult policy of The Pru- 
dential, 164 

Spectator, the, on health-insur- 
ance fallacies, 17 ; criticism of 
Manhattan Co-operative Relief 
Association, 19 ; on the British 
Prudential, 30, 31 ; on Indus- 
trial insurance, 30, 103, 104, 
169 ; interview with life under- 
writers, 44, 45 ; on attack on 
The Prudential, 145 ; on The 
Prudential, 145, 146, 156 ; on 
the insurance of children, 182 ; 
on anti-discrimination laws, 
185 ; on Industrial insurance 
progress, 203, 204 ; on Indus- 
trial rates, 226 ; on Industrial- 
Ordinary insurance, 231. 

Spencer, Herbert, on Industrial 
insurance, 2 ; on co-operation, 
18 ; on credulity and belief, 
316 ; on evolutionary tenden- 
cies, 137 ; on ill-advised legis- 
lation, 317. 

Sprague, T. B., on life insurance 
of children, 129, 159. 

Sprague, Actuary, Connecticut 
Insurance Department, on val- 
uation of Industrial policies, . 160 

State life insurance a failure, . . 16 

State supervision of Industrial 
companies, 135, 180 

Statistical data demanded by Mas- 
sachusetts agitators, 230 

Status, transition from, to con- 
tract, 6 ; vs. contract, 75. 

Stock, sale of Prudential, . . 145, 146 



33^ 



INDEX. 



Page. 

Stokes, Thos. T., on Industrial 
insurance, 278 

Straight canvassing, results of, 
250 ; increased efforts at, 269. 

Success, of Industrial companies 
in doubt, 103, 105 ; of The 
Prudential by 1879, 118 ; in In- 
dustrial insurance, difficulty of, 
168 ; of Industrial insurance, 
evidence of, 173. 

Suicide clause, in the Prudential 
policy, 155 ; removed, 229. 

Sumner, Charles, on taxation of 
life insurance, 256 

Sumner, Professor W. G. , on social 
duties, 6 ; on charity, 41. 

Sun Life Insurance Co., The, or- 
ganized, 183 

Supply and Printing Departments 
of The Prudential, 301 

Surplus of The Prudential, 1876- 
1899, 298 

Surrender value, inexpedient in 
Industrial insurance, 87, 88 ; of 
Industrial policies, 87 ; in In- 
dustrial insurance, 164, 165, 
170 ; attempt to pass laws, 170, 
211, 212 ; question discussed, 
170, 171, 188, 189, 214, 295, 296; 
after two years, 184 ; law of 
New Jersey, 1895, 213, 214; 
privilege of Industrial policy- 
holders, 235 ; cash, 237 ; mis- 
conception of question of, 296. 



Taxation of life insurance, 113, 
256 ; taxes on Industrial and 
Ordinary policies assumed by 
the Company, 256 ; taxes paid 
by The Prudential, 267. 

Tax-payer, Industrial insurance 
and the, 307, 308 

Temperance and Industrial insur- 
ance, 241 



Page. 

Tennessee, attempts to prohibit 
insurance of children in, . . 216 

"The Prudential," bi-monthly 
publication, 301 

Thornton, George H., 117 

Thrift, defined, 4 ; Industrial in- 
surance encourages, 91, 164, 
169, 170 ; Industrial agents 
teachers of, 148 ; Industrial 
insurance a modern form of, 
287. 

Tilt, Dr. E. J., on child insurance, 192 

Times, New York, on Govern- 
ment insurance, 16 

Trenton True American on child 
murder and Industrial insur- 
ance, 128 

Tribune, New York, attack on life 
insurance, 26 ; approval of In- 
dustrial insurance in 1875, 64; 
on insurance of children, 152 ; 
on Prudential progress, 169. 

Tubercular diseases, mortality 
from, in the Prudential's ex- 
perience, 310, 311 

Tuckett's Insurance Journal on 
straight canvassing, 12 

Twisting of Industrial policies, . . 181 

U 

Undertakers and Burial Insur- 
ance Co., Richmond, Va., . . 35 

Union plan of the New York Life 
Insurance Co., . . ... 27 

Union or Bund plan a failure, 27 
(see also Bund plan in life in- 
surance). 

United Brethren Mutual Aid, . 106 

United States Funeral Directing 
Co., a failure, 173 

United States Industrial Insur- 
ance Co., organized in New- 
ark, N. J., 180 ; reinsurance of, 
181. 

University Settlement Society, 
unwarranted attack on Indus- 
trial companies, 213 



INDEX. 



337 



Page. 
V 

Valuation of Industrial poli- 
cies, 122, 160 

Value, of Industrial insurance, 
68, n8, 119, I47> 148, 158, 161, 
162, 177, 178, 216, 217, 221, 222, 
239, 248, 263, 264, 271, 272, 274, 
276, 277, 281, 290, 297, 298, 307, 
308, 314 ; of Prudential con- 
cessions to policy-holders, 313. 

Vaught, Dr. R. L., on Industrial 
insurance, 217 

Verdict of the masses on Indus- 
trial insurance, 286, 314 (see 
also Approval). 

Vice-President of The Prudential, 
L. D. Ward elected, 154 

Victoria Assurance Society and 
American life companies, . . . 31 

W 

Waldorf-Astoria, banquet at the,' 
1898, 252 ; 1900, 318. 

Walford, Cornelius, on funeral in- 
surance, 35 

Walker, Amasa, on Government 
insurance, 35 

Walker, Francis A., on economic 
truths for the masses, .... 47 

War, mortality experience of The 
Prudential, 255 ; permits to 
policy-holders, 255 ; revenue 
taxes on Industrial policies, 
255, 256. 

Ward, Edgar B., Counsel and 
Second Vice-President of The 
Prudential, 69, 127 

Ward, Iy. D., organizer of The Pru- 
dential Friendly Society, 69 ; 
elected Vice-President of The 
Prudential, 154; executive skill 
of, 154 ; on negro life insur- 
ance, 209-211; on straight 
canvassing, 249-251 ; on claim 
payments, 257 ; on payment of 
Industrial dividends, 261 ; on 
agency management, 270, 271 ; 



Page. 

tribute to Superintendent Ege- 
nolf, 282. 

Washington, D. C, effort to estab- 
lish Industrial company in, 67 ; 
Industrial Life Company in, 78. 

Watchword, Prudential agents', . 252 

Webb, Sydney, on Fraternal in- 
surance, 7 

Weekly-payment plan, first ap- 
plied in life insurance, 8 ; early 
approval of, 14 ; of the Amer- 
ican Popular Life, 21 ; of the 
New York Life, 27 ; of the Pea- 
body Life, 36 ; popularity of, 
101 ; early instance of, in. 

Weekly Underwriter, on life in- 
surance for children, 128 ; on 
insurance legislation, 135 ; on 
State supervision, 135 ; on In- 
dustrial lapses, 141 ; on Gov. 
Butler's attack, 149 ; on Indus- 
trial insurance, 150 ; on The 
Prudential, 197 ; on Colorado 
legislation of 1899, 281. 

Wells, David A., interest in In- 
dustrial insurance, 168 

Western and Southern Industrial 
Insurance Co., 181 

Western New York Life Insur- 
ance Co:, Bund plan of, ... 29 

White, Samuel H., on Industrial 
insurance in 1874, 44 

White, Dr. W. P., on Industrial 
insurance, 217 

Whitehead, Hon. John, first appli- 
cant to Widows' and Orphans' 
Friendly Society, . . . .110 

Widows' and Orphans' Friendly 
Society, character of , 37 ; Bund 
plan of, 38 ; Teutonic character 
of, 38 ; charter amended, 57 ; 
John F. Dryden and the, no. 

Willoughby, W. F., on working- 
men's insurance, 284 

Windsor Hotel fire, 271 

Wise, Henry A., on Government 
insurance, 35 



338 



INDEX. 



Page. 



Women, as Industrial agents, 87 ; 
members of Colorado Legisla- 
ture in favor of Industrial in- 
surance, 281. 

Workingmen's insurance, early 
efforts at, 1, 6 ; by health-insur- 
ance companies, 17 ; compa- 
nies, objects of, 20 ; companies 
in 1868, 20; companies, fail- 
ures of, 20, 101 ; of the New 
York Life Insurance Co., 27 ; 
on the Bund or Union plan, 27 ; 
I 875, 65 ; defined, 284. 

Workingmen's Life Insurance 
Co., Chicago, 111., 

Workingmen's Union, New York 
City, 

Wright, Elizur, on life-insurance 
5 agents, 14 ; on Industrial in- 



20 



20 



Page. 

surance, 15 ; on post-office in- 
surance, 16 ; on Government 
insurance, 16 ; savings bank 
plan of insurance, 36, 59 ; 
Family Bank scheme of, 43 ; 
attacks on life insurance, 43 ; 
criticism of, by Insurance 
Times, 44 ; attacks Industrial 
insurance, 46; misrepresenta- 
tion of, proven, 47 ; on life 
insurance for the poor, 64 ; 
mistakes of, 98, 99. 
Wright, Mrs. Harriet G. R., ap- 
proval of Industrial insurance, 281 



Yates, Henry J., elected Treasurer 
of The Prudential, 154 



JUN 27 1900 



